MDU Owners Debate Virtues, Vices of ONTs

At the Broadband Properties conference in Dallas on Monday, speakers weighed the pros and cons of laying fiber all the way to individual apartments in multiple dwelling units (MDUs).

Verizon’s SVP Technology Mark Wegleitner extolled the virtues of laying fiber all the way to each separate unit with terminations at in-unit optical network terminals (ONTs). But real property developers and managers pointed out certain problems with bringing one particular provider’s equipment all the way into a resident’s apartment or condominium.

"Our initiatives in the MDU space have increased significantly," said Wegleitner. "You see the growing importance of MDUs for the Verizon fiber-to-the-premises (FTTP) deployments." (For more on MDU competition, click here.)

Wegleitner said Verizon has two strategies for MDUs: treat each unit individually or take fiber to a communications closet and use existing infrastructure – coax, CAT-5 or telephone wires – for the separate units.

"It depends what the preferred approach is for a given building," he said.

Verizon’s in-unit ONT provides bandwidth of 870 MHz for linear video and speeds of 622 Mbps shared among 32 customers for voice, data and VOD. The company plans to deploy a small-scale, desktop ONT in third quarter 2009.

But some in the MDU industry said they would rather minimize the amount of time service techs spend in individual units.

One reason for this preference is that owners would rather have more oversight over technicians who come to work on the equipment. And owners want to keep their residents happy, meaning they don’t like technicians fishing around in residents’ bedroom closets.

"A lot of time service providers are not employees; they’re contractors," said Karen Seemann, director of ancillary income at Essex, a real estate investment trust. "I just don’t want you going all the way into my unit."

Kent McDonald, director of resident technology with real estate investment trust AIMCO, cited several other reasons he doesn’t want in-unit ONTs.

"The best place for an ONT would be a closet, and you need electrical power," said McDonald. "We don’t favor punching holes. Also, we have concerns about battery backup replacement. We have concerns that residents are on the hook for replacing batteries. (Also), the design/review process goes quicker when less fiber is being laid."

But the in-unit ONT provides higher bandwidth and higher speeds. "We’re going to continue to assess it," said Steve Merchant, VP of revenue strategy for Equity Residential.

Changes for MDU owners

Several years ago, the trend for MDU owners was to strike a deal with a particular Internet and/or video provider, to rely on that provider to wire the property for services, and to offer the services as a value-add or at a reduced price for tenants. But with more competition among providers who are offering more choices and bundles, things have gotten increasingly complicated for property owners.

"Owners are realizing that if they want to provide choice, they have to make an investment," said Richard Holtz, CEO of InfiniSys, a multi-family technology consulting and design firm.

But owners aren’t sure how to invest to "future-proof" their properties.

Residents of apartments and condominiums expect to have connections for HDTV and high-speed Internet, and they make their purchase decisions mostly on price and quality of service, said Holtz, adding that most residents aren’t interested in how the technology works.

He said video and Internet providers could make life a lot easier for MDU owners if they would agree on open standards, such as those promoted by the Telecommunications Industry Association (TIA).

With open standards, fiber could be brought to a communications closet, usually located in some utility area or basement of the MDU complex. Then fiber could be laid to each individual unit and work with any service provider’s equipment.

"We recommend an 8-12 millimeter micro-duct be installed from the communications room to the unit and then from the unit to the main video distribution outlet in the unit," said Holtz. "When fiber eventually happens and it’s an open standard, then you can use fiber."

The smarter owners are asking: ‘When are you going to have a multi-family ONT?’" said Holtz.

In the meantime, MDUs often don’t have the infrastructure to provide particular services to residents, or each unit is wired with a mish-mash of cables and outlets to accommodate multiple providers.

– Linda Hardesty

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