Broadband Communities

OCT 2018

BROADBAND COMMUNITIES is the leading source of information on digital and broadband technologies for buildings and communities. Our editorial aims to accelerate the deployment of Fiber-To-The-Home and Fiber-To-The-Premises.

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O C T O B E R 2 0 1 8 | w w w. b r o a d b a n d c o m m u n i t i e s . c o m | B R O A D B A N D C O M M U N I T I E S | 2 7 • ey have not thought through the need for other networks in a building to handle fire alarms, video security, energy management and so forth. • ey are not sure about future tenant demand. But the Census Bureau reports that the percentage of people on regular payrolls (that is, getting a W-2 tax form at the end of each year) who work entirely at home grew from 3.3 percent of the workforce in 2000 to 5 percent in 2016 to 5.2 percent in 2017. In raw numbers, that is an increase from 4 million to 8 million people. e Census Bureau also counts more than 10 percent of the workforce in the "gig economy" either part time or full time. It is unclear from census data how many households or occupied dwelling units have residents working from home. Do both members of a household tend to work at home? Only one? Is the pattern different for couples than for young workers sharing living space to split the rent? Is the gig (job, not bandwidth) part time or full time? Is the home business a small added income or a major part of family income? Render reports (in this issue) that 58 percent of condo owners under 35 sometimes work from home and that 19 percent have home-based businesses. e best advice is for MDU owners and managers to survey the needs of their own tenants and prospective tenants. What is absolutely clear is that home-based workers need fast, reliable, symmetrical broadband. NEW PRODUCTS FOR MDU DEPLOYMENTS Vendors now offer new products to make MDU fiber deployments ever- cheaper to implement. e fiber is thinner and more flexible than in years past. Connections rarely require fusion splicing, so deployments are faster and require less skilled labor. Fiber can be pulled inside with no splice at all – workers can simply strip off weather shielding. Hubs are smaller as well, making fiber easier to deploy and maintain with standardized trays and simple but effective gaskets that allow easier maintenance. Older buildings benefit, too, with techniques that combine existing copper with wireless, G.fast, DOCSIS 3.1 and true, all-fiber, passive optical networks that terminate at a property line or basement. THE RENTAL TRAP Even experienced property developers and broadband suppliers fall into the new economy's financial traps when they justify broadband builds. One glaring example: New MDU construction is overwhelmingly for rental units. e percentage of owner- occupied dwelling units overall has fallen from its peak – nearly 70 percent – to 64 percent today. Young, first-time buyers and those who lost their homes to foreclosure or short sales in the recession have great difficulty finding mortgage lenders. Rental costs are rising relative to income, driven by the resulting demand for rental units. is has increased the number of unrelated people who share apartments and ostensibly single-family housing units. Deployers are well tuned to credit issues. us, there has been an increase in the number of households offered bulk services, in which broadband costs are treated as part of the rent rather than as a separate fee. is saves residents money, cuts deployer operating costs, and puts building owners on the hook for the fees. But it also reduces tenant broadband choice and induces many to take only the bulk package with no extras. at in turn, requires buildings to spend on good wireless infrastructure while tenants look to over-the-top services and even cellular for other content. Tenant churn creates a hidden cost for deployers, however. Unrelated people renting apartments together are particularly unstable tenant groups even when each individual tenant has a good income. As tenants move in and out of apartments and swap partners, the actual monthly broadband revenue earned by deployers tends to stay close to the promotional price. No longer can deployers depend on higher revenues from tenants who have METROPOLITAN STATISTICAL AREA (RANKED BY NUMBER OF UNITS PERMITTED) TOTAL 1 UNIT 2 UNITS 3-4 UNITS 5+ UNITS NUMBER OF STRUCTURES 5+ UNITS OR GREATER AVERAGE SIZE 5+ STRUCTURES Milwaukee-Waukesha-West Allis, WI 2,237 1,037 84 3 1,113 30 37 Omaha-Council Bluffs, NE-IA 2,939 1,778 20 32 1,109 26 43 Indianapolis-Carmel-Anderson, IN 5,671 4,478 84 27 1,082 33 33 Louisville-Jefferson County, KY-IN 3,020 1,959 8 30 1,023 45 23 Des Moines-West Des Moines, IA 2,945 1,918 14 - 1,013 23 44 Total permits for MSAs permitting 1000+ units Jan-July 2018 466,699 263,532 5,874 5,240 192,053 5,575 34 Total for all MSAs, Jan-July 2018 687,619 438,499 9,812 8,647 230,661 7,609 30 Table 1: Residential permits issued in 2018 in 45 MSAs through July. These are all MSAs with permits for at least 1,000 dwelling units in MDUs of five units or more. For MDUs in all MSAs, see Table 2, digital-only bonus content. Source: Bureau of the Census.

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