Internet wiring a profit center for buildings.

Internet wiring firms are starting to wire up city buildings as an amenity for tenants and creating a profit center for buildings.

In seeking a solution for its own internet access challenges, one tenant has teamed up with a Soho building owner to provide high speed internet access for itself, as well as the other tenants. While the hooked up tenants now save time and money on internet accessibility, the building owner has now developed a new profit center for the property.

The enterprise began about a year ago when tenant Creative Media Generations, a college services group that publishes Link, The College Magazine and hosts the web site Digital Campus, realized it needed more control over its web site than what its service provider could offer.

When they began exploring the installation of a direct internet access T1 line - which operates about 25 times faster than a 28.8 modem on a practical basis - they balked at the cost.

Not only would they have to pay a service fee of $1,500 to $2,000 per month, but the start-up costs would exceed $4,000.

That was when Peter Kraft approached Soho Building owner Stephen F. Anfang to see what they could do.

"He's a great landlord because he's so interested in staying on top of these things," said Kraft. "He wants whatever he can get for his tenants."

Together, they started a company called fastIN Providers that has now begun hooking up the tenants of the Soho Building at 110 Greene Street and will soon explore providing this service for other building owners.

The Soho Building is the test model and they have a 12 month plan to get 24 tenants onto the site. "At that point, it's not only a nice perk but it becomes a nice little profit center for a landlord," said Kraft, who explains that internet access will start to make money after six tenants join. "With twelve tenants, it starts to bring in a nice cash flow, and with a quarter of the building, you are talking about significantly supplementing a building income."

Kraft and Anfang have worked out a sliding fee scale so that as more tenants join, the price goes down for everyone, and those in first will reap the greatest discount. For instance, the first tenant pays $600 per month, but after 11 other tenants join, that tenant would only pay $341, while that 12th tenant would be paying $424. All the charges are a mere fraction of what they would otherwise pay for the direct service.

As a building owner, Anfang says the only way to wire the building is to do it building wide. "You can't do it tenant by tenant because you can't have ten companies running through with wires," he said, advising that it's important to have a real estate person involved who understands the confines of the physical structure as well as tenant needs. "If you have hung ceilings, it's one kind of job vs. the open ceiling left buildings where you are running the wires through risers."

That's one of the reasons former broker Daren W. Hornig got involved with Internet Wired, where he is managing director of business development.

"We custom fit out for each particular building," he explained.

The company, which provides internet service through an affiliate, PFM Internet, has already wired 342 Madison and 611 Broadway, and is in conversations with many other buildings.

"There will be some compensation to the owner, but it varies from building to building," he said. "The landlord will be compensated for use of the space of the riser."

The service is a benefit for tenants because one of the major problems with accessing the World Wide Web from a 14.4 or 28.8 modem is that it takes a very long time to download information. Today's web sites are loaded with pictures and videos that can take many minutes to fully come through the wires to the monitor.

"When you are accessing through a 28.8 modem it's called the World Wide Wait," laughed Kraft. "Most people don't have the patience and are losing interest."

But those companies that make a living off the Web, or that need to access the Web for information or send files and E-mail around the world for communications purposes, are finding the waiting time costing them time and money and becoming more than an annoying constraint against their business.

And since the business world is starting to rely on the web to send information between corporate offices, the shared T1 solution is an obvious one for these firms.

"Most businesses don't need the full bandwidth in full time usage," explained Kraft. "We can bring in one T1 line and provide it to every tenant, where no one sees a slowdown and everyone is getting their information about 25 times faster."

Kraft says they are able to monitor bandwidth usage and like any other cooperative venture, expect the tenants not to overuse the system.

"It's shared and everyone knows they are not constantly supposed to be downloading videos and hogging bandwidth," he said. Nevertheless, they have calculated that even if every tenant in the building joins the program, they will only tap 50 percent of the T1 capacity during typical usage, nor do they anticipate any material slowdown as additional tenants join the program.

Hornig said they will bring in multiple T1 lines, if necessary, to a central distribution point in the building and from there run fiber optic cables. Their fees are a function of the amount of bandwidth needed by the tenant.

A T1 line moves information at a million bits per second, he explained. And most tenants don't normally need that bandwidth. But a 20,000 square-foot tenant with everyone wired up and sending information everywhere all the time might.

"We are an internet service provider (ISP) so we solve the full function for what a tenant would need in a particular building," said Hornig.

They don't charge anything to the owner but instead, resell the service directly to the tenants. The tenants pay $350 to $925 per month, depending on their bandwidth usage, with no restriction.

"From the tenant's standpoint, it's very effective," said Hornig. "We can turn on service in two days, once the building is wired."

As for security, Kraft says there are no exposures with a building-wide program that there aren't already with a permanent connection to the internet. "A permanent connection to the internet has risks and downfalls no matter what," he said. fastIn also provides security tips to tenants to help prevent host computers from being hacked.

Meanwhile, the T1 line at 110 Greene Street has been activated about two weeks and is generating calls from prospective tenants who see the sign in the lobby and want to know more about the program.

"We don't know of any other buildings in Soho that are providing this service," Kraft added.