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Council of New York Cooperatives & Condominiums
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Conference Highlights

Publication Date: Winter 2000

Every autumn, the Council of New York Cooperatives & Condominiums holds its day-long information-packed Housing Conference at Hunter College, where 60 workshops and seminars present unparalleled opportunities for board of cooperatives and condominiums to learn and to share information on every aspect of operating their buildings. The following article, providing an overview of high-speed Internet access options available to buildings and their residents, is based on information presented at a workshop at the 19th Annual Cooperative Housing Conference, chaired by Michael Jay Wolfe, president of Midboro Management, Inc.


HARNESSING THE INTERNET FOR YOUR BUILDING

Technology has brought about enormous changes in the way New Yorkers live and work, and this has created new challenges for cooperative and condominium boards. With more and more shareholders and unit owners going online and adopting new technologies, boards are faced with new decisions that will affect building finances, the sales prices and marketability of the apartments, and the everyday lives of building residents. The key to staying on top of the technological wave is to do your homework and try not to panic new technology is available every day, but that doesn.t mean you have to have it all.

GETTING CONNECTED
For most individuals and businesses, the doorway to the Internet is through an Internet Service Provider (ISP). The best-known ISP is America Online, which provides software that makes it easy for users to get onto the Internet. The field also includes Mindspring, RCN, Earthlink and others. Most home Internet users now connect to their ISP's using modems, ranging in speed from 28.8K (28,000 kilobytes per second) to 56.6K. But others, generally those who work from home or do a lot of Web-surfing, are looking to higher-speed access.

And that.s where the board comes into the equation. Many high-speed access options require bringing additional wiring into the building, so there are economies of scale to be had if many residents convert to any new technology at once. The ultimate decision rests with the board because these options generally require contracts with the building.

According to Michael J. Wolfe, President of Midboro Management, Inc., there are now a handful of options for high-speed Internet access, and boards need to choose carefully among them. "The important thing to remember is that you don.t need to rush," he says. "New technology is coming along all the time. You don.t want to be the first on your block to adopt a new technology; you do want to make the best choice for your building." The current crop of high-speed Internet access options includes two front-runners --Cable Modem and Digital Subscriber Line (DSL). Here.s a look at both:

Cable Modems.
Cable modems are devices that attach to the cable TV network connection in a home. This broadband technology is being offered by the cable companies, including Time Warner and RCN. The two advantages of cable modems include speed and convenience. They can download information from the Internet at up to 30 megabytes per second, and they are always "on" --you never have to dial up; when you turn on your computer, you.re online.

The main drawback of cable modems is that the bandwidth is shared among all users on a line, so as more users in a neighborhood get online at the same time, your access could slow to a relative crawl. Another problem is that at this time in New York City, many homes can only receive one-way cable modem --they download information through the cable modem, but upload data (sending e-mail and requests for Web pages) through a phone line. This means that users will pay about $40 per month for a cable modem, and still have to set aside a separate telephone line for uploading.

Many boards might feel their options are limited in the cable arena. The dominant cable player in New York City, Time Warner, has a franchise contract with the City through the year 2008 to provide service. This means that even if one resident of your building wants to use Time Warner, you must allow them access to your building. However, you can bring in other providers to offer service at the same time. Shop around to see if these alternative providers will offer a better price to residents. If you use this option, note that the second company can use Time Warner cables inside apartments, but must bring in their own outside wires and string their own cable in the public areas of the building. "This may not be practical for some older buildings," says Mr. Wolfe. If they can.t bring it up the elevator shaft, it could mean core drilling to get the wire in. Most buildings would rather concentrate on a leaky roof than on getting cable wire into the building."

Digital Subscriber Line (DSL).
DSL provides high-speed access to the Internet, corporate networks and on-line services over ordinary phone lines. That is, you can surf the Internet and speak on your telephone at the same time. That provides enormous advantages whether at home or at work. DSL is fast --more than 100 times faster than 56.6K modems. And, like a cable modem, it.s always on.

DSL requires some installation. The company you use --dozens of companies, including many local ISPs, are installing DSL in residential buildings --must place a piece of equipment called a "router" into your building, usually in the basement. This allows the digital signal to travel to computers in individual units. The cost of installing this piece of equipment is generally borne by the ISP --if it is assured that it will sign up a certain percentage of residents for service. This is all part of the negotiation between the board and the provider.

One major drawback to DSL is that not everyone is capable of getting it. Your building must be within about 18,000 feet of a central phone company switching station. That.s "telephone company" feet, not actual distance. A good way to find out whether DSL is available to your building is on the Website DSL Reports (www.dslreports.com). Type in your home area code, phone number and address, and it will deliver the verdict. This Website is also a good place to begin your search for a DSL service provider, with more that 800 providers in its database. It shows you service options, specials and prices.

But DSL offers one major advantage over cable modem: your data travels along your own line, so your speed isn.t reduce by others surfing at the same time. DSL comes in a selection of speeds, from 128K up to 2 megabytes of transfer capability (faster than a T1 line, which runs at 1.5 megabytes per second). Service costs to users generally starts at $40 per month (about the same as a cable modem). THE

"BLEEDING EDGE"
A third option is wireless access to the Internet. Compared with cable and DSL, this is "bleeding-edge" technology, and is now mainly used in high-end hotels and businesses. In a wireless scheme, the building is wired with a high-bandwidth connection --usually a T1 line --and then fitted with transmitters on every other floor (depending on the floorplan and other considerations)o-on-demand. The transmitters communicate with wireless modems in each user.s apartment. This option is a viable option for older buildings where stringing wire is difficult and costly. It is currently being implemented in the Plaza hotel in Manhattan, where each room will soon have wireless Internet access.

NEGOTIATING AN ACCESS DEAL
According to Mr. Wolfe, the best route for cooperatives and condominiums is to negotiate a building-wide access deal for all residents. "You can be assured that if you wait and do nothing, individual tenants will start bringing in their own solutions one by one," he says. "Instead, you can provide significant economies of scale to all residents, and help improve apartment values overall, by getting one large package deal for the entire building."

This means researching the options and providers available to your building, then contacting the providers serving your area. Remember, notes Mr. Wolfe, that you have a lot to offer providers --namely, a demographically attractive group of users. Don.t speak to just one provider; many offer limited-time deals and other incentives. For example, providers may throw in the router and other necessary equipment for free if they believe they can sign a certain percentage of the building. The cable operators may give users the required cable modem and the first month.s access for free. In addition, most providers will become partners with the building, paying a percentage of the monthly fees to the building. Co-ops and condos may choose to pass this incentive along as savings to residents. "It.s like any other bidding process," says Mr. Wolfe. "You want to know the market before you go shopping, and you want to make sure you get the best possible deals."

 
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