Want a story about how the big telco/cablecos lock up an entire building for internet services? Be warned, it's a boring subject, but if you're a real estate investor in MDUs, an architect, construction project manager, or general contractor, this may be helpful to consider.

My company is often hired by real estate investment groups to audit a building they're looking at purchasing. We look for potential areas of concern and suitability for a unified network backbone (think "smart building infrastructure")— WiFi, door locks, access control, etc.

Let's say I'm am a real estate developer about to break ground on a 10-story apartment building. It costs a lot of money to do this and I'm looking for ways to save costs wherever possible.

I know that my building wouldn't be very attractive to renters if they didn't have a way to get Internet and there are 3 common ways to bring internet service into an apartment: COAX, Ethernet, and Fibre. So I call up my telco/cableco for a chat.

The cableco+telco offers me this: "we'll run fibre to every unit in your building, it will require zero effort on your part, it won't cost you a penny, and if your tenant wants Internet, they can call us directly; oh and here's a 10yr contract."

This is very enticing. An owner can have both telco and cableco each cable their buildings, saving $100-$400k in the process? It's no surprise that many owners get sucked into the dream and the savings that comes with the pitch; So they invite the teclo/cableco in.

Fast forward a few years later. The building is sold to a new owner and they want to convert the apartment to off-campus student housing and offer free WiFi throughout the property so that wherever a resident is in the building, they'll have strong internet service.

There's a big problem: the infrastructure doesn't exist to do that. Well, it exists, but it's owned by the telco/cablecos and you're forbidden to use it. Now what? They re-cable, at a greater cost than it would have been for the original owner to do it before the drywall went up.

This past week, we sent three proposals alone, ranging from $147K to $232K to run new cabling in buildings that aren't even that old. The larger properties are even more expensive to re-cable.

So that sweet deal to for the original owner is a bitter pill for the new owner to swallow. The building has handed over their tenants to the cableco/telco and they've learned what smart builders and owners already knew: always own the cable installed within your walls.

This is the #1 issue we identify to potential buyers and we regularly deliver the bad news: if you buy this building, you're going to spend another $100-$300K, because the current owner doesn't own the cable plant within the building.

From my perspective, there's a couple pieces of advice I'd offer:

1) if you build a property and don't own the cable plant within it, it's going to hurt you. Investors are becoming more savvy and they have people like me helping them understand the limitations they might face.

2) We can't predict the future, but we can plan for it. You never know what the future will bring. The cablecos/telcos know this and when you let them in, you give up all control (and potential customers). And remember these contracts are 10 years long.

While the telco/cablecos push building owners into a corner, fortunately education is slowly increasing as builders, architects, and developers are learning about the risks and limitations of lock-in so they can make more informed, strategic decisions.

Thanks for coming to my TED Talk about #telecom and #networking in the #studenthousing, #seniorliving markets! Know an architect, investor, or builder in the #MDU market... please share (and maybe re-tweet?)

This thread presumed cables in conduit, but @Jaydamon1 (Beanfield COO) made a good point: builders should ensure adequately-sized conduit should be installed to building units even if cabling isn't run in them at the start. (cheaper/easier to run cable in conduit later.)