Telecom is all too often an afterthought for apartment companies; however, like water and power, this utility should be appropriated early in the development process. And given residents’ ever-growing appetite for bandwidth, the gigabit needs to be not only part of your vocabulary but a key discussion point, said a panel of industry experts at the 2015 NMHC OPTECH Conference & Exposition.
According to the 2015 NMHC/Kingsley Apartment Resident Preferences Survey, high speed internet is the most desired apartment feature, with 94 percent of respondents saying they are interested or very interested in having it as an amenity. To stay competitive multifamily owners and operators need to understand its increasing importance.
The gigabit refers to the high-speed transfer of data between two telecommunications points at a rate of about 1 gigabit per second. So, if dial-up internet is a garden hose, the gigabit is a fire hydrant, explained InfiniSys’ Richard Holtz.
The Bozzuto Group’s Todd Butler said it’s important to remember that “fiber does not mean gigabit” even though the terms are often used interchangeably. You can have fiber and not have gigabit internet. In regions like the Eastern seaboard, it’s more of an undertaking to implement gigabit (versus the Midwest, for example) because your likelihood of having to retrofit is higher in East Coast properties. Overall, gigabit locations now cover 22 states.
The panel concurred that gigabit internet exceeds current apartment resident bandwidth requirements. Student housing, however, tends to have higher requirements. Holtz said, keep in mind that there is a range of eight to 12 devices per student. That translates into a gig or better per property.
“Netflix represents 50 plus percent of the traffic, but if you can make that traffic local, it will cut the traffic usage in half,” he said.
While the next generation of apartment residents will have greater need for more bandwidth, other things such as medical imaging and hologram technology could dramatically increase bandwidth requirements going forward. Given the exponential nature of technological advancement, the panel offered these tips for future proofing your communities:
- Go for Shorter Provider Contracts
Village Green, said Andrea Humanic, the company’s executive manager for VG Preferred, is focused on looking at gigabit from a geography perspective given a large amount of their communities are in the Midwest. “With the changing landscape and needs,” said Humanic. “We’re focused on shorter term contracts to prepare for what we believe will be a greater influx of competition that could reduce our expenses.”
“You should also have strong Service Oriented Architecture, or SOA, in any contract,” said Holtz. “The internet is such an important amenity and, if it goes down, your residents will respond-this will impact your social media coverage, rating site reviews and bottom line.”
- Get into New Construction Early
Jay Kenney, CIO for Lincoln Property Group, said he was asked to ready the company’s communities for future bandwidth needs. The goal was to make sure the new apartments were ready and ask what households would need-especially considering that many data-eating systems are going on at once, from TV to gaming to Skype. He responded by creating technical requirements for new construction that would ensure new buildings would be ready to accommodate the future demand for bandwidth from emerging technologies.
“For new construction, we want gig service and more than one carrier in the community, no exclusivity,” said Kenney. “We also wanted something like a google fiber, or if they weren’t in the area, another service that was similar.” He added that, ultimately, they decided “to get this in the hands of the professionals based on speaking with their construction companies.”
- Consider Your Intermediary Carefully
If you make your management company the intermediary between tech and internet problems, that is something you need to reconsider, noted Butler. “Your management company will then receive the brunt of the punishment from residents versus having them call the provider. So there really has to be a cost benefit analysis to having a tech intermediary on a property.”
In conclusion, the panel was asked about the future and, specifically, about the Internet of Things and its impact on bandwidth requirements. While the current impact was considered minimal, Butler emphasized that as time goes on, manufacturers are “trying to find every little way to utilize processing space-including hooking up toasters and washing machines to the internet.”
“This will continue to creep up on the industry,” quoting Moore’s Law, which states that transistor processing capacity doubles every 18 months, Butler reiterated that the time frame for technological advancements has shortened and that you should plan accordingly.
Bottom line: Be ready now or be sorry later.