Smart Buildings Meet Technology Demands

SAN MATEO (04/03/2000) - At 55 Broad St. in Manhattan, 16 ISPs, eight long-distance companies, and six local dial-tone providers all cohabitate in a single skyscraper, forming the nation's first "smart building." These office buildings are outfitted with advanced networking technology. They are feeding the current appetite for alternative broadband access technologies and bandwidth and changing the way corporate America is being wired.

They also promise to reduce the cost associated with setting up complex technology infrastructures, something many companies that are ramping up for e-commerce now face.

"We need a lot of bandwidth," said Manuel Ron, CEO of Electronic Sales Systems, a business-to-business industrial supplies start-up company and 55 Broad St. tenant. "When we were looking for a building four years ago, all of the other places we were looking at would have cost us a decent amount of money to wire them the way we needed."

The Internet's emergence as a vital communication channel makes open access a critical issue.

"Many of the landlords here in New York City now almost have to provide wired buildings," Ron said. "Not just for the dot-com companies but for most companies, which are so reliant now on the Internet for communication."

But a vocal group of emerging telecom carriers and service providers claims that without policy changes, the broadband industry cannot meet its potential.

The problem: deeply rooted relationships between commercial building owners and entrenched telecom players, such as AT&T Corp., and local phone giants, namely the Bell operating companies.

When stalwart players strike deals to wire a building before it is constructed, newer players are shut out, said officials of the Association for Local Telecommunications Service (ALTS), which spearheads the Smart Buildings Policy Project, an awareness campaign and political movement advocating smart buildings.

"Choice delayed is choice denied," said David Turetsky, senior vice president for law and regulation at Teligent, a fixed wireless carrier and ALTS member in Vienna, Virginia, citing the mantra that cuts to the heart of the Smart Buildings Project.

"The [Smart Buildings Policy] Project is designed to encourage building owners to allow competitive access, to allow all carriers to compete on an equal footing, and to allow tenants to have options on who they get their services from," said Jonathan Askin, general counsel at Washington-based ALTS.

Project sponsors also argue that traditional means of outfitting office buildings often deny tenants the added bandwidth and enhanced services now available.

But how and whether the government should prescribe such access to private buildings has raised a hornet's nest of issues circling the project.

Specifically, the Federal Communications Commission (FCC) is poised to issue new rules that would require landlords to provide telecom providers nondiscriminatory access to office buildings.

In moving forward with the rule-making necessary to require open access to buildings, the FCC has met with a lot of resistance from the real estate industry. Earlier this month, 11 real estate associations joined as the Real Access Alliance and argued before a subcommittee of the House Judiciary Committee that the proposed FCC rules amount to a "taking" of private property and would violate the Fifth Amendment.

Those rules "would require building owners to acquiesce to an uninvited occupation on their private property," said Steven Rosenthal, an attorney representing the Real Access Alliance.

The FCC is not expected to issue any rules mandating access to buildings before summer, said ALTS' Askin, who added that ALTS is anticipating that some lawsuits on the issue may soon crop up.

John Gilbert, executive vice president and chief operating officer of Rudin Management, which runs 55 Broad St. and other smart buildings in New York, doesn't think the government needs to intervene.

"We've been a kind of industry poster child which says to the government, 'Hey, you don't need to mandate access,' " Gilbert said.

The 400,000 square-foot 55 Broad St. building boasts a horde of carriers offering various technologies (see chart, bottom left).

"Rudin Management did this all by itself," Gilbert said. "For us, it was a value proposition in terms of making this investment in our buildings. We are a good example of how the market can and will react."

The building at 55 Broad St. isn't the only smart building Rudin operates in Manhattan. Also on the list is 3 Times Square, a high-profile building Rudin is constructing to house the new U.S. headquarters of Reuters, the giant news and financial services company.

Just last fall Rudin also signed on the 32 Avenue of the Americas building in Manhattan -- which is, ironically, the former home of AT&T's headquarters -- as another of its smart building endeavors. Rudin will likely bring in a host of AT&T's newest competitors to transform the building into a smart building wired for players in the Internet and e-commerce industry.

"There will be people in that building with all of the new hubs, routers, and servers that we call the picks and shovels needed to compete in the New Economy," Gilbert said.

In the end, it may be the New Economy that drives access to office buildings, according to Michael Sloan, president of Internet upstart eLink Communications, in Washington. The company is a new-breed telecom integrator focused on stringing the latest networking technology through buildings as they are constructed. Others include Broadband Office, Allied Riser, and Cypress Communications.

"All of this talk about open access is good for us," Sloan said.

Teligent's Turetsky agreed.

"All too often, the landlord with a building full of tenants on long-term leases is slow and unresponsive in making arrangements with new carriers," Turetsky said. Given the spate of new access options available, most tenants will become increasingly discontented with the narrow choices building owners typically offer, he added.

A very smart building

Manhattan's 55 Broad St., run by Rudin Management, offers the following services.

Technologies

* Single and multimode fiber optics

* High-speed Category 5 copper wire

* Satellite accessibility

* Videoconferencing

* DS-3, T1, fractional T1, and 10Mbps/100Mbps of bandwidth* ISDN* LAN and WAN connectivity* Cable-ready access* OC-48 switching capacityProviders offering services* AT&T* Bell Atlantic* MCI Metro Services* Sprint* Teleport Communications Group* Time Warner* Winstar* MCI WorldComSOURCE: WWW.BROADST.COM.

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