Room at the Inn

Need to share facilities? Check into carrier hotels.

In the trendy, fickle world of retail merchandising, competitors group together to benefit from one another's customer traffic. The result is shopping malls, power centers, restaurant rows and massive autoplexes. Likewise, in the booming world of telecommunications, service providers also are seeking common ground, but for very different reasons. With customers having no need to visit their providers' physical locations, the benefits of co-location are shared infrastructure and common space requirements.

Co-location is a relatively new trend in the communications industry. It first gained widespread attention with the passage of the Telecommunications Act of 1996, which attempted to create a level playing field between the well-established, incumbent local exchange carriers (ILECs) and the new CLECs. The act mandated that ILECs allow CLECs to co-locate within their premises the equipment necessary to connect to the ILECs' cable and wire networks. If that is physically or technically impossible, then the CLECs are to provide "virtual" co-location.

With the explosion of other types of telecommunications services, co-location has grown beyond the 1996 Act to encompass a wide range of communications services that voluntarily co-locate. Internet service providers (ISPs), digital subscriber line (DSL) providers, data- and voice-processing companies and large corporations requiring "hot" backup communications systems all are looking for facilities capable of housing their switches, computers, routers and modem racks. From this need has evolved a new type of facility known as a "carrier hotel."

Communications companies also need to concentrate their attention and financial resources on new technology and their core services rather than real estate and construction. As a result, companies that previously built their own switch facilities now are opting to locate predominantly in carrier hotels.

What Makes a Good Carrier Hotel?
Carrier hotels have been built from scratch but increasingly are being located within existing structures that are suited to the use. Existing buildings that are being readily converted are older high-rise or multistory office buildings, or warehouses. Whether new construction or conversion, the basic physical requirements for carrier hotels are the same: floor-to-ceiling heights of 10 to 16 feet; floor-load capacities of at least 100 pounds per square foot; adequate floor chases; access to optical fiber loops; space for dry coolers; and space for electric generators.

Within a carrier hotel, individual tenant space can range from a few hundred square feet to the entire facility, depending on the area and customer base that it will serve. Developing a carrier hotel within an existing facility can be accomplished in as little as 15 weeks when the infrastructure is readily available, but can take much longer if new infrastructure is required. Individual tenants usually will need another 10 to 12 weeks to finish out their spaces before equipment arrives.

The final cost for construction typically ranges from $150 to $400 per square foot. Contributing substantially to these costs are the specialized systems required to protect sophisticated switch equipment: air-conditioning systems; redundant power supplies to ensure uninterrupted 24/7 operations; pre-action fire-protection systems; and raised floors for the routing of cables and conduit.

Co-Location in Boston
Although co-location is taking place in almost every major market in the nation — from New York to Los Angeles and Chicago to Dallas — fewer cities are better suited for the trend than Boston. The city has historic ties to the technological revolution of the past two decades, high levels of telecom and Internet usage, a large telecom research and engineering education community, dense residential populations, a progressive business community and a good inventory of convertible buildings.

A prime example of a successful conversion is Boston Internet City, a former steel warehouse along the Massachusetts Turnpike that Cabot, Cabot & Forbes (CC&F) is converting into a carrier hotel for ISPs. The 282,500-square-foot warehouse is being expanded to 450,000 square feet with the addition of a third floor.

The development of Boston Internet City began with CC&F identifying the warehouse as a potential carrier-hotel site. Carter & Burgess then was retained to assess the merits of the existing facility and create a list of end-user requirements for the renovated product.

The planning process included identifying locations for power generation and fuel supplies consistent with industry standards for normal and backup power 0151 vital to the round-the-clock needs of telecom and Internet providers. Also identified were locations for tenant HVAC systems and access routes for fiber-optic cables, standard cabling and HVAC piping.

After the planning stage and initial zoning documentation was completed, Carter & Burgess worked with CC&F's team of architects and engineers to prepare construction documents for the facility's crucial mechanical and electrical systems.

When completed later this year, Boston Internet City will be the area's first Internet data center and the largest facility of its type to date in New England.

Developers' Perspective
While the explosion of the telecom industry has been the primary impetus for the growth of co-location, the real-estate-development community has played a key role in promoting the trend. With telecom companies amenable to the concept of co-location, developers are racing to identify suitable existing buildings and market them as carrier hotels.

Co-location is providing developers with the opportunity to breathe new life into properties that may have been languishing in their portfolios. What's more, these projects are filling up with tenants that are typically larger and more stable than common business-office tenants are. Telecom-service providers typically lease large square footages, they are comfortable signing 10- to 15-year leases, and rather than breaking a lease early and leaving, they probably will opt for more space if it is available.

Carrier hotels can reap some side benefits for developers as well as local neighborhoods. The types of existing buildings suited to carrier hotels — older warehouses and mid-rise buildings — usually are found in industrial areas or downtowns, and sometimes in blighted areas past their prime. The return of a thriving, tax-paying business can mean a lot to the local economy.

Telecom companies also often attract other types of technology-related businesses — including dot-coms and software-applications developers — that want to co-locate within the same facility or nearby. And their employees, often young and upscale, may be interested in living nearby in warehouses converted into lofts. They, in turn, may attract dining and retail establishments. The possibilities can be intriguing for developers.

Invisible Neighbors
Although there's been an explosion of activity in the carrier-hotel business in the past few years, their presence in most areas still is not known widely. They typically don't mark their presence with rooftop signs or street-side monuments, and that is by design. With the increasing importance of telecommunications in the smooth functioning of everyday life, security is a top priority. And the foundation of any good security plan is to keep a low profile.

For these reasons, an auto tour of city streets will not reap a list of carrier hotels to consider, nor will a scan of the white or yellow pages. Instead, a commercial real-estate agent may be the best source of information, and the results of that contact may be surprising. That seemingly ordinary, quiet office building or warehouse you pass every day during your commute just may house the companies that route your phone calls or provide your Internet service.

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Types of Co-Location

There are four basic types of co-location:

• ILEC central office (CO) co-location: These co-locations are mandated and regulated by the FCC and allow CLECs to occupy space within the COs of incumbent local exchange carriers (ILECs). Regardless of the law, space and equipment constraints can make these co-locations difficult to achieve, requiring a CLEC to seek a "virtual co-location" with an ILEC or another type of co-location.

• Competitive access provider interexchange carrier co-location: These co-locations bring together communications carriers for the purpose of accessing and selling bandwidth.

• Web server co-location: Internet-service providers physically co-locate with their own equipment to connect into a Web server's bandwidth, or they "virtually" co-locate and use all of the server's capabilities, including bandwidth, servers and routers.

• Shared infrastructure, or neutral co-location: Telecom companies co-locate to share physical infrastructure — power, cooling and security systems — and not bandwidth or auxiliary services.

Ballew is vice president of communications for Carter & Burgess, a national engineering and architectural consulting firm.