Clear communication: a lesson in the basics of repositioning a property for cable, broadband and digital video.

While there are myriad technical issues associated with the evaluation, testing and installation of wiring infrastructure on an existing property, there are five basic objectives to consider. Kessler explains that by having a basic understanding of each, they become a user-friendly evaluation tool when dealing with telephone, cable and broadband.

The property's newly landscaped entrance burgeons with lush hues and fragrances that wind along the drive. The roadside guidepost is now a proud, hand-carved sign with new colors and a changed name. At the end of the drive are professionally designed recreational areas and a clubhouse beckoning those who seek a leisurely retreat. You have planned, managed and paid for each of these improvements to create the perfect invitation for passersby seeking the perfect apartment home. And it's working, or is it?

The leasing office is reporting steady increases in traffic from prospective residents, however, both new and renewed lease numbers remain stagnant, and the management team continues to feel that the property currant market position will not permit an increase in rental rates.

One variable frequently overlooked when repositioning properties is access to digital video and broadband, high-speed Internet services. More critically, the existing wiring infrastructure responsible for delivering or inhibiting the delivery of these services is frequently overlooked either during the purchase of a property or the planning of a property's rehabilitation for repositioning in the marketplace.

Wiring Infrastructure and More

For apartment properties, wiring infrastructure typically refers to the cable television and telephone wiring running underground, attached to poles, through buildings and into each cable television and telephone outlet located in the residents' units. And for nearly 50 years, there was verb little change in the type of telephone and television wiring manufactured single family or multifamily housing.

However, in just the past few years, significant changes have taken place in cable television and telephone wiring manufacturing, installation standards and certification criteria. These changes have been driven by technological advancements and regulatory oversight by various governmental agencies: i.e., Federal Communications Commission (FCC).

Unfortunately, it was not until recently that the overall multifamily housing industry began to recognize the affect of these changes on property value in the manner in which "value" relates to the purchasing, refinancing and repositioning of existing properties.

As a traditional model, the logistics of planning capital expenditures for repositioning existing properties is largely based on improvements in the physical grounds of the property and the individual units. These are oftentimes accounted for during the purchase and/or refinancing of a property. At other times, these are simply forced by changes in the marketplace when refinancing is not an option.

However, to pursue such purchasing, refinancing or repositioning efforts without first evaluating a property's existing wiring infrastructure can effectively diminish the value of even the most dramatic repositioning effort. And while such an evaluation involves a number of objectives, each can be easily understood and achieved.

Unraveling Mystery

While there are myriad technical issues associated with the evaluation, testing and installation of wiring infrastructure on an existing property, there are five basic objectives to consider. These will assist a property owner in getting a firmer grip on a property's ability to deliver digital video and broadband Internet services to residents. At first, these five pieces of the puzzle may seem complicated. However, with a basic understanding of each one, they become a user-friendly evaluation tool.

When evaluating the existing wiring infrastructure it is important to study:

* the type of wiring used between and within each building (i.e., category 3 or category 5 for telephone, RG59 or RG6 for cable television);

* if the wiring inside the building is looped or homerun;

* where the cable television and telephone company distribution boxes are located (for the property in general, and for the each building/floor in specific);

* the placement and total number of cable television and telephone outlets per unit; and

* the existing contracts between the cable television, telephone and or Internet service providers.

Telephone Wiring

In short, category 3 wiring is the type of inside wiring used for telephones for the past several years. And while there have been some minor changes, this wiring has remained the same. As such, most every apartment property in the United States has installed either some type of category 3 wiring (or less, category 2) for telephone service.

As broadband, high-speed Internet technologies and services have advanced, some property owners have allocated for the installation of category 5 wiring. This type of wiring typically functions for both telephone and high-speed Internet services. Its mat advantage, however, is its ability to offer 10 times the performance of category 3 wiring for certain broadband Internet technologies and services (i.e., online gaming, streaming video, etc.). But it is rare indeed to find an existing property with category 5 wiring installed.

Unfortunately, many developers continue to install either category 3 wiring, or perhaps category 5 wiring, but incorrectly. Despite even the most progressive of efforts by some developers and owners, many category 5 wire installations are done poorly by unqualified contractors and fail to meet standards that far exceed that of category 3 wiring. The end result is a category 5 wiring installation that has no more capacity or function than category 3 wiring.

It is important to understand that when considering the rewiring of a property, it is not always necessary to replace category 3 wiring with category 5 wiring. It is possible that if residents are able to access high-speed DSL (digital subscriber line) service from the local telephone company, which is delivered over category 3 wiring, upgrading this wiring may not be necessary.

Cable Television Wiring

There are two main types of cable television wiring, RG59 and RG6 coaxial cable. In the same manner as category 3 and category 5 wiring, RG59 is the oldest and most prevalent type of wiring installed in multifamily properties, although it is not quite as uncommon to find RG6 wiring as it is to find category 5 wiring.

This is largely due to cable companies adopting the routine practice of installing RG6 wiring, as well as the wiring manufacturing companies discontinuing the production of RG59.

As cable television and Internet technologies created digital video and broadband Internet, and as cable companies decided to offer both of these services over the same wire, the push for RG6 was essentially mandated by both the cable companies and manufacturing companies.

The physical properties of RG6 are significantly superior to RG59 for the purpose of delivering high-quality digital video and broadband Internet access. Additionally, RG6 coaxial cabling is extremely robust for use as a wiring infrastructure solution to deliver broadband Interact services other than those offered by the incumbent cable or telephone company.

As such, property owners evaluating the prospect of rewiring their properties may elect to install RG6 rather than category 5 wiring for the purpose of broadband Internet connectivity. The installation of RG6 wiring rather than category 5 wiring for this purpose is less costly, for many reasons. It is also less sensitive to damage or interference and possesses greater potential for higher bandwidth (the capacity of a wire to carry large files--greater bandwidth permits faster Internet connections for sending and receiving files such as e-mail, documents, pictures and video).

A Broadband Solution

A conventional wisdom among category 5 enthusiasts is that it is superior to all other forms for wiring for broadband, high-speed Internet service on apartment properties. And when designed and installed correctly by professionals, it can prove to offer tremendous options and opportunities to a property and its residents. However, few experts argue that a category 5 installation can be costly and disruptive to residents, and it possesses certain distance limitations. But these can be overcome with such things as fiber optics.

When asked about the bandwidth capacity of RG6, Dan Sahlin, a senior engineer with Multilet, said, "Repeated studies show that RG6 coaxial cabling has literally 10 times the bandwidth capacity of category 5 wiring. Additionally, coaxial cable is far easier to install as it is much more easily connected." For tight budgets, these features oftentimes make the use of RG6 coaxial cabling a more affordable alternative than category 5 wiring.

Another potential advantage of RG6 to category 5 wiring is its availability on existing properties. Tee Harton, a senior engineer with Coaxmedia said, "RG6 provides superior capabilities in terms of the amount of bandwidth available to residents, when compared to category 5 wiring. Additionally, for many apartment properties RG6 already exists, which oftentimes eliminates the need to rewire a property at all. For other properties where RG59 exists, no more than a relatively inexpensive upgrade may be necessary."

Boxes and Outlets

Knowing the location of the incumbent cable and telephone companies' boxes that serve the property and its residents is important.

This information will be critical, should the decision be made to rewire a property for cable, telephone or Internet services. In many cases, the location of these boxes will determine where new wiring must begin mid end.

Knowing the current number and location of all existing cable and telephone outlets (in each unit) is important. Typically, mature properties have an inadequate number of cable or telephone outlets per unit, or the locations were poorly planned. And according to Mike Kolb, of MDU Systems, "It is not sufficient enough to rely on original construction drawings to determine the number and location of outlets. Over a period of time, residents will have requested the local cable or telephone company to install additional outlets, which is typically done without the property owner's knowledge. This is routinely done despite the requirement of most properties for residents and service providers to first obtain approval from property management."

In making these evaluations, consider the current location of existing computers and televisions within the units, noting preferred locations for the installation of new outlets should the decision be made to rewire the property.

Existing Contracts

The study of existing contracts for cable, telephone and Internet wiring, can become extremely detailed and complex.

However, the basic elements in the existing menu of services and contracts between the current cable, telephone and Internet service providers and the property are:

* the current video, voice and Internet services they each offer to residents of the specific property in question, rather than the "surrounding area" (i.e., Are they currently providing digital video and or high-speed Internet service to residents?);

* limitations to their delivery of the service(s) as a result of inadequate wiring infrastructure on the property;

* statements regarding who owns the cable and or telephone wiring inside each building and individual unit.

Ownership

When evaluating an existing property's wiring infrastructure, the property owner completes a process that will guide the decision to either upgrade or not upgrade the existing wiring. Or, the information from this process will guide the decision to force the renegotiation of the sale or purchase price of a property.

But even after determining the type of wiring infrastructure and if it requires upgrading, certain facts surrounding the ownership of the wiring may render all such considerations moot.

Addressing the lack of clarity on owning wiring infrastructure on existing properties, multifamily telecommunications attorney Matt Ames of Miller & Van Eaton said, "The matter of owning inside cable or telephone wiring is rarely as clear as many property owners think.

"Two common misperceptions about inside wire ownership are that file property owns such wiring as a permanent fixture to the property, or that the property owns the inside wiring once the service provider's contract is expired. But rarely is either of these correct.

"The only truly clear indication of inside cable or telephone wiring ownership is when an owner can establish the wiring was installed at the cost of the property (all labor and materials were provided by the property), and when the existing contract clearly establishes such ownership. And while there are other circumstances establishing ownership, they are certainly less clear."

Uncle Sam 

During the past few years, the FCC has established and revised a series of rules to assist both the service provider and the property owner with who owns the cable and telephone wiring inside each building and individual unit.

Accordingly, the various bureaus of the FCC have created a different set of rules for each type of wiring--cable and telephone. But to further complicate matters, some states posses certain statutes (Mandatory Access Statutes) that in most cases, prevent property owners from claiming ownership of the inside cable television wiring, despite the FCC's new rules.

Further addressing the subject of inside wiring ownership, Jim Arbury, Senior Vice President of Governmental Affairs for NAA/NMHC, said, "We have successfully lobbied the FCC to understand the need of property owners to fairly acquire ownership of the inside cable television wiring, particularly as this wiring can become a lifeline for a property to provide the digital video and broadband Internet services required to remain competitive within its market place."

Arbury added, "Fortunately, after a tremendous amount of effort they [FCC] understood the property owner's needs and recently passed a ruling in their favor. However, there are still many battles remaining in establishing ownership for television wiring in mandatory access states and for telephone wiring in most every state."

A Starting Point 

This article is meant to serve as a starting point. It addresses the basics of evaluating an existing property's wiring infrastructure as part of an overall refurbishing and repositioning plan. But us with the subject and science of repositioning properties, there are many detailed (albeit not overly complicated) issues to address when evaluating the existing wiring infrastructure.

Just as refurbishing a property may be as simple as changing a sign, adding a few trees and repainting the exterior of the building, upgrading the wiring infrastructure may be as simple as adding a small amount of new wiring or upgrading the existing wiring.

Conversely, as it may be necessary to completely overhaul u property's landscaping, exteriors and the interior of each unit, it may also be necessary to install a completely new wiring infrastructure.

In reality, however, the efforts and capital expenditures for most properties involving the improvement of the property, its services and its wiring infrastructure will fall somewhere between these two extremes.

Internet Resources

As the study of the five basic wiring infrastructure checkpoints discussed in this article continues, each can be explored to significantly greater depths. The only dependent factors fur more in-depth study are interest, need and time. Following is a list of valuable resources:

Federal Communications Commission www.fcc.gov

National Apartment Association www.naahq.org

National Multi Housing Council www.nmhc.org

BICSI Standards Organization www.bicsi.org

Home Automation Association www.connectedhome.org

Larry Kessler, CEO of InteliCable Group, is a leading expert and advisor on the digital video, broadband Internet, structured wiring and contract negotiations for the multifamily housing industry.