Competitive carriers are handing apartment dwellers the keys to high-speed access.
Workers and residents in high-rise buildings, commercial business parks, campuses, hotels and condominiums--buildings that fall into the category of multitenant units (MTUs)--also are beginning to be targeted by carriers offering digital subscriber line (DSL) services.
Of course, the first wave of DSL primarily targeted individual small and medium-sized businesses and technically affluent consumers from DSL concentrators located in central offices (COs). But this next major wave of deployment is under way as Internet service providers (ISPs), competitive local exchange carriers (CLECs) and other service providers bypass the CO to install DSL concentrators directly in the basements of MTUs. The concentrators work over ordinary copper telephone wiring, transforming a building's telephone loop into a T1 replacement circuit.
In 1998, the market for CO-based DSL concentrators took off much more rapidly than anyone in the industry had predicted. By this time next year, pundits may be saying the same about the MTU market.
MTUs represent a lucrative opportunity for service providers to gain new customers. Service providers are beginning to generate profits from the burgeoning bandwidth demands of Internet access, small office/ home office (SOHO), teleworking, and corporate virtual private network (VPN) applications. DSL concentrators already are successfully deployed at MTUs around the United States, and the number of "high-speed" or "Internet-ready" buildings and campuses around the country is exploding.
More than 118,000 multitenant office buildings in the United States provide office space to business customers and are prime targets for in-building deployment. According to Department of Energy surveys, there are approximately 31,000 skyscrapers, 26,000 mid-sized buildings and 61,000 small buildings in the United States. With this large pool of potential new customers, MTUs may be one of the fastest-growing markets for 1999. Some analysts predict that new MTU installations of DSL concentrators may exceed new CO installations by 2000.
A Livable Solution
Service providers are finding an eager market for in-building DSL services as building owners and property managers realize they can enhance property values and increase building revenues by offering in-building, high-speed data connectivity to their tenants. An advanced communications infrastructure in commercial office buildings is a value-added amenity that helps property owners attract and retain premier tenants.
Business tenants also benefit from MTU-based, high-speed connectivity. Increasingly, they are viewing high-speed connectivity to the Internet and to their corporate networks as a requirement for doing business. Small businesses want to graduate from low-speed, dial-up modems or integrated services digital network (ISDN) lines to high-speed Internet access and branch-office or remote local area network (LAN) connectivity, while tenants that are T1 customers can reduce their costs with DSL Internet access.
With DSL technology, tenants enjoy speeds up to T1 and always-on connectivity (DSL is 20 to 50 times faster than the dial-up analog modems) at a price typically far less than traditional T1 access. The DSL concentrator also provides businesses with dedicated access through wide area networks (WANs), allowing them to link remote users to Internet and corporate information resources.
DSL subscriber connectivity is provided at each tenant location by customer premises equipment (CPE) such as modems and routers. The most widely used DSL concentrators are compatible with a broad variety of CPE, enabling the tenant to chose among CPE with a variety of price points and capabilities.
A Good Fit
Because a DSL concentrator in an MTU may serve far fewer subscribers than one at a CO, profitability can hinge on deploying a concentrator with the correct size and port density. Scaleable solutions allow service providers to purchase precisely the products they need, based on the size of the building and the needs of its tenants, rather than "shoehorning" a large box into a small property.
DSL concentrators are available in different form factors and with varying numbers of ports to fit the needs of the MTU market. While today's symmetrical DSL (SDSL) concentrators support a full range of applications at selectable speeds ranging from 128 kilobits per second (kbps) to 1.544 megabits per second (mbps), concentrators that support other types of DSL, such as the G.lite and high-speed DSL2 (HDSL2) standards, and an even wider range of bandwidths, are expected later this year.
By profiling a building--determining its square footage and the number of tenants--an MTU service provider can choose the concentrator that best fits the communications needs of each building. Service providers that use DSL to offer tenants a range of communications services--not just Internet access but voice or premium data services such as corporate networking, private branch exchange (PBX) extension, frame relay, VPN or voice-over-packet solutions--profitably can serve not only large office buildings, but properties with as few as 20 tenants.
MTU Characteristics
There are three basic types of multitenant buildings, categorized by area and the number of tenants, each imposing certain requirements on the DSL concentrator.
1. Skyscrapers or other buildings with an area of more than 500,000 square feet typically house 20 or more establishments. This environment requires access concentrators with maximum flexibility and expandability from as few as 48 to as many as 768 concentrator ports.
2. Mid-sized buildings range in area from 75,000 to 500,000 square feet and house 11 to 20 organizations. This type of building requires a scaleable concentrator with 24 to 48 ports and a smaller form factor, which reduces cost and the amount of space required to house the equipment.
3. Small buildings with an area between 25,000 and 75,000 square feet typically have six to 10 business tenants, each with 30 to 200 employees. Buildings this small need an entry-point concentrator with four to 16 ports and a small form factor.
There are two main methods used to provide the backbone connection from MTU-based DSL concentrators to the regional point of presence (POP). Service providers that target a market segment (skyscrapers, for example) with buildings scattered across a metropolitan area may employ wireless transmitters. Service providers that install DSL systems in many MTUs located in a well-defined geographic area typically employ a T1 or other wire line to connect MTUs to the central site.
While the first service offered to tenants is usually Internet access, service providers can generate additional revenue by offering a variety of high-margin services that allow tenants to connect to corporate networks. Some concentrators offer a variety of network models an ISP can configure and optimize on a per-port basis for specific services.
A large percentage of branch and remote offices connect to their headquarters via frame relay networks. With frame relay multiplexing in the DSL concentrator, tenants can save money by replacing both the T1 access to the frame relay network as well as the frame relay access device. This network model provides end-to-end permanent virtual circuits (PVCs) from the tenant through to the ISP or corporate headquarters. For branch offices that require secure corporate connectivity, the ISP can offer VPN services.
DSL concentrators for the MTU also can support DSL-based voice services, including derived voice and plain old telephone service (POTS). Derived voice services employ voice-over-packet technology to deliver toll-quality voice connectivity over the Internet. The two primary derived voice services are PBX extension, which provides remote offices with the functionality of the corporate PBX over DSL lines, and toll bypass, which allows tenants to packetize voice traffic over DSL to a packet gateway via the public switched telephone network (PSTN).
Because WAN bandwidth requirements change as building penetration increases, a DSL concentrator ideally should offer several WAN interface options, such as 10/100Base-T, T1 with integral channel service unit/data service unit (CSU/DSU) and DS-3 frame. Even DSL can be used as a WAN option. By connecting a DSL concentrator in a building's basement to another concentrator at the CO, the service provider can use DSL as the backhaul mechanism all the way to the network edge. This dramatically can reduce recurring costs by eliminating the need for a leased T1 to the ISP POP--and is an increasingly popular deployment tactic for carriers and service providers targeting even the smallest buildings within reach of a CO.
Regardless of the size or number of buildings, or the size of the concentrator selected for each property, service providers need management tools that allow them to easily configure, diagnose and monitor concentrators at hundreds of MTUs from a central site. Service providers can use management tools to match service offerings to the budget and bandwidth needs of each tenant, and to migrate users to higher-speed services in real time with no hardware upgrades.
Management tools must be flexible to partition the network across multiple tenants, distribute network visibility and establish feedback loops to ensure the bandwidth delivered to tenants matches actual usage requirements. Service providers can monitor the status of any port or module and simultaneously view and compare multiple modules or groups of ports.
A Changing Market
MTU-based DSL is not only changing the way high-speed connectivity is offered, it also is an important factor in the emergence of a new type of service provider that specializes in serving MTUs. Service providers use DSL to cost-effectively deliver Internet access, VPNs, frame relay services, derived services and more, concurrently from a single platform. By locating a DSL concentrator in the MTU, service providers enjoy substantial backbone cost savings, plus a sustainable competitive advantage in penetrating the tenant population. Multiple networking models provide additional revenue opportunities and ensure that tenants can connect to corporate networks or to network service providers.
Multitenant DSL FAQ Q: Is competitive local exchange carrier (CLEC) certification required? A: No. Most multitenant unit (MTU) providers are Internet service providers (ISPs) with no central office (CO) collocation plans. Q: Should I target businesses (MTU), consumers (multidwelling unit [MDU]) or both? A: Evaluate the profitability of offering services to each segment, and the concentration of potential customers. While MTU buildings are typically concentrated in downtown metropolitan areas or office parks, MDUs are spread throughout a city. Q: How do I reach local landlords? A: Although approximately 40 percent of all real estate is owned by Real Estate Investment Trusts (REITs), 60 percent is locally owned and operated. Most local real estate owners are active in the chamber of commerce and other local organizations. Discuss how digital subscriber line (DSL) data services can add value to their assets and help them attract and retain premier tenants. Q: What tips can help REITS or landlords expedite service? A: Provide turnkey equipment/service packages that enable the property owner to speed delivery of communications services. Select a DSL partner that offers not just DSL equipment, but all the services needed to quickly get buildings wired for service--including installation services, network management services, marketing program development and training. Offer a wide selection of compatible customer premises equipment (CPE) to satisfy different customer requirements. And select a DSL partner that provides cost-effective solutions for any segment or building type--whether large downtown MTU office buildings, or mid-sized apartment complexes in rural areas. |
Charles Dauber is multitenant product marketing manager at Copper Mountain Networks Inc., San Diego. He can be reached at (650) 858-8500, ext. 264 and cdauber@coppermountain.com.
