By
Larry Kessler
Chance (chàns) noun; an opportunity
Ev·o·lu·tion
(èv´e-lushen) noun; process of
change
From the first
moment someone important in our lives muttered the words “you are taking
a chance,” a negative impact remained. In this context, the perception of
‘chance’ and ‘risk’ become dangerously interchangeable
when in fact, they are not. Being a player in today’s multi dwelling unit
(MDU) marketplace as a system operator is frequently referred to as
“taking a chance.” But for operators and owners desiring to achieve
long term success, taking a chance must be viewed as opportunity rather than
risk. And while risk is most certainly a preeminent concern for property owners
entering into agreements with private system operators, it is the opportunities
offered by the better operators that continue driving the MDU industry’s
interest.
Chance,
Risk and Choice
Although few
have read beyond his writings about boyhood, Mark Twain is also widely credited
with his keen observations on the development of American Enterprise.
Frequently relating the facts of life with business, he once stated that
“The first half of life consists of the capacity to enjoy without the
chance; the last half consists of the chance without the capacity.” For
the early SMATV (satellite master antenna television) system operators, there
was more opportunity than risk in purchasing equipment and installing a couple
of large satellite dishes on the property of an apartment complex. In most
cases, franchise cable ignored these properties and did little to improve their
product or service. As such, the opportunities were nearly limitless,
particularly with many property owners willing to joint venture on
installations.
For property
owners there was also more opportunity than risk, or at times choice in having
a private system operator install on the property, as franchise cable
frequently by-passed properties during construction or took years to arrive in
the suburbs. Such service offered leasing advantages. In the early stages of
the private system operator and property owner relationship, both were able to
enjoy the opportunity of private cable without chance, without risk. However,
as technology, Wall Street and Washington D.C. have evolved, and as consumers
have rapidly adapted to the changes of this evolution, chance is being rapidly
transformed back from opportunity to risk for private system operators failing
to continue evolving. And
operators failing to evolve with these changes have created new risk for the
property owner. Unfortunately, this has forced owner’s to protect their
primary asset of rental revenue by selecting voice, video and data service
providers who either have or will soon evolve into true broadband service
providers.
Change-alution
Both respected
and reviled, Charles Darwin is greatly credited with setting fire to the theory
that in order to survive one must evolve. In order to evolve one must be able
to adapt to change in the environment. Without change then, there can be no
evolution. Although Darwin’s intellectually polarizing theories could
have never conceived of Silicon Valley, their timelessness play out well with
the development of private broadband services in the MDU environment.
Private
Broadband Evolution Facts
FACT: Private
system operators that have failed to develop a digital video tier of
programming have already begun to see a dramatic impact on their ability to
acquire or renew service and easement agreements with MDU property owners.
FACT: Private system operators that have
failed to keep their promises of upgrading existing systems with digital video
service commensurate with the level of programming offered by the local
franchise system operator have seen a significant decrease in the voluntary
renewal of existing agreements by property owners.
FACT: Private system operators that have
failed to develop a strategy for the delivery of broadband high speed Internet
access either in-house or in a strategic alliance with specialized Internet
service providers (ISP) have seen a significant decrease in their ability to
acquire service and easement agreements with MDU property owners.
FACT: An MDU owner’s stream of rent
revenue from MDU residents has and will continue to be impacted by the quality
of voice, video and data services available on the property.
FACT: The property owner’s first
priority is to protect this rental revenue, which has and will continue to be
done in part, by removing inadequate service providers and replacing them with
those who have evolved with both technology and consumer demands for customer
service.
FACT:
Private system operators that have evolved into providing a form of
digital video programming and broadband Internet access are enjoying
unprecedented success in acquiring service and easement agreements with MDU
property owners.
FACT: MDU property owners who are seizing the
opportunity to access quality, private broadband services for their residents
are experiencing positive results.
Dogs Will
Fly
Perhaps this
is pushing the idea of evolution too far. However, the image is correct; reach
beyond anticipated or expected boundaries. This defines what being a private
system operator or an MDU property owner working with such an operator is
about. From the inception of SMATV technology, private system operators have
worked to define a new industry, to continually create and give evolution to
something different, something better. But not so long ago the evolution
stopped. Digital video was not taken seriously. Larger channel lineups were commonly thought to be
unnecessary and high speed Internet access, well. . .
Unfortunately,
at the same time the private operator industry began slowing or in some cases
halting its evolution, the rest of the voice, video and data industry began its
evolution of rapid change. During the past two years the flow of money from
both venture capitalists and Wall Street to franchise cable systems, Internet
service providers and the Bell companies has broken records. Combined with the
most rapid development of new technology ever recorded in American history,
these companies are storming into the MDU marketplace with new products,
promises and attitudes toward customer service. To further enhance their
already formidable positions, the Federal Communications Commission (FCC) has
determined that allowing these companies to merge into monopolies even greater
than those that existed prior to the Telecommunications Act of 1996 (originally
designed to eliminate such monopolies), is a-o.k. But all this means is that
the score is now tied, 1-1.
Taking
Advantage
The single
greatest advantage for every private system operator and the private broadband
industry as a whole is the ability to turn on a dime. Private broadband service
is the fighter jet of the voice, video and data world. Franchise cable, the
Bell companies and national Internet service providers are the large, slow,
fuel guzzling cargo planes. The early private operator industry was the first
to soar into the marketplace of specifically developing packages and benefits
for MDU residents. Big cable was sleeping and the Internet was far from
becoming a common household word. But after several comfortable years and
without any long term strategies, the private operator industry grew
complacent.
Until
very recently, little research and
development resources put into new equipment, technologies and services. To
further worsen matters, the industry as a whole has lacked the leadership
necessary to develop training programs and standards, as its competition has.
It has lacked the educational platforms required to insure both operators and
property owners the ability to evolve with the future. All the while, the
competition was lifting off to come back a hundred-fold of what they once were.
And they have continued flying in the right direction, without any deviation
from their course. But this only makes the score 1-1.
Private system
operators, more specifically private broadband system operators have a chance
to make the score 2-1. You still have the distinct advantage of being able to
turn your technologies, products and services on a dime. You still have the
advantage of knowing more about the MDU marketplace than franchise cable and
the Bells could ever hope to know. After all, you created the industry of
specializing in service to MDUs. These distinct advantages are the tools to
reaching this new stage of evolution, the broadband evolution.
Big Bang
Most people
subscribe to the Big Bang theory of evolution. Highly simplified, the earth was
once nearly 100% covered in water. In this salty, organic cauldron there were
billions of one cell structures. One night a meteor exploded into the oceans,
charged the water with electricity and created life which from this point would
continue to evolve according to the laws of nature; no evolution, no survival.
Today,
broadband technology is the private system operator’s Big Bang. Broadband
defines the evolution of the new private system operator. Formerly introduced
for the first time to private system operators and nationwide MDU property
owners during this year’s Private & Wireless Broadband Conference, both property owners and system
operators are seizing the moment and working to make Private MDU Broadband
service a reality.
Previously
struggling without meaningful leadership, the private system operator, property
owner and equipment manufacturer attendance and participation at this
year’s event has signaled a change from Silicon Valley, to Washington,
D.C., to Wall Street. Those of us in attendance who are from the MDU property
owner side witnessed what we believe to be the genesis of the new private
broadband operator industry. Our sincere hope is that the energy and drive
exhibited during this event, as well as the commitment of Private &
Wireless Broadband to take the helm of leadership for education, training and
marketplace representation is fulfilled and creates a greater opportunity for
us all.
As changes in various broadband technologies for the delivery of digital video, high speed Internet and IP telephony continue, both private operators and MDU owners must make education their highest priority. Fortunately, in a bold initiative to provide this education on a continued basis, Private & Wireless Broadband will be developing and presenting a number of critical continuing education seminars for providers, owners and manufacturers alike. It will seek to create new challenges, alliances and resources to insure that within a very short period of time, the concept of “chance” will be restored to its original meaning of “opportunity.” But more importantly, it means that private broadband operators and property owners of both residential and commercial MDUs will have a chance to create a new competitive environment of endless opportunity.
Larry Kessler is CEO of InteliCable Group, a national firm exclusively representing residential and commercial multidwelling unit property owners, developers and management firms in researching, developing and negotiating digital video and broadband infrastructure, service and contracts. He may be reached with questions and comments via e-mail at lkessler@intelicable.com.