Growing student technology needs have owner/operators re-thinking their approach to bandwidth, with those offering high-speed, reliable Internet access gaining competitive advantage.
Forget granite counter tops, luxury pools and state-of-the art media rooms — Internet service continues to be the Number 1 amenity in student housing. And while some operators are continuing to toss more bandwidth on the table to handle the increasing use of consumer streaming offerings and a growing number of devices per student, others are playing it smarter by investing in proper management and improving utilization of available bandwidth.
The typical college student today could have as many as six, mainly wireless, devices, most of which are wireless, and three roommates, also potentially using six devices each, in one housing unit. So it's not unusual to have 24 devices in one unit all connected to the Internet at the same time. The end-users want, and generally expect, all of those devices to be up and running at all hours of the day and night with minimal wait.
At one property that was nearing completion, students didn't seem to mind using Porta Potties while the bathrooms were being finished, as long as the Internet was up. They want it more than water; they want it more than air conditioning in the summertime; and they want it operating at high-speed. And if they don't get it? Well, they take to social media — or worse, move out, letting all their friends know that said property has an Internet problem.
The answer to this increasing demand for high-speed Internet over the past several years has been a call for more bandwidth. And while web-based applications like Netflix and Hulu will continue to drive up the demand over the next few years, there is a general misconception, and a fair amount of confusion, in the industry surrounding the topic of bandwidth, particularly as it relates to student housing assets, says Jonathan S. Greenwald, president and chief executive officer for Florida-based Tinian Communications, LLC, which provides commercial-grade TV, Internet, Wi-Fi, phone, data hosting and network management services for student housing properties, among others.
"Many are advocating simply throwing more bandwidth at the issue, with one direct effect of dramatically increasing owners' operating costs," he explains. "One reason is that many vendors are incentivized to sell bandwidth; others lack certain basic technological understanding and/or skill sets to properly address the challenges."
Managing (not Adding) Bandwidth
Andrew Marshall, EVP of Campus Technologies Inc. lays out in a white paper published in July 2012 how critical technology's role is in the success of student housing as a real estate asset class. "Since 2007, the student-housing sector has matured and attracted the interest of institutional investors and proved to be less volatile than other real estate sectors during the economic downturn," Marshall writes in the paper titled "Future Bandwidth Requirements and Operation of Student Housing Networks."
"At the same time, the technology landscape has shifted dramatically, and with it the expectations of student residents." To meet these expectations, Marshall points out, a student housing community not only must provide very high end-user bandwidths, it must also offer almost perfect reliability and low latency, or response times. The end-user determines whether his or her experience is good or bad not just based on the bandwidth, but based on the latency and stability of the connection.
"Usually when people have an Internet problem, it's not because they don't have enough bandwidth, it's because their bandwidth isn't configured or managed properly," Marshall says. "Ninety-nine percent of bandwidth management for student housing is being handled by people without specific experience of managing networks for the student demographic."
John Baloga, vice president strategic planning and chief investment officer for Airwave Networks, a communications network management company in Annapolis, Md., says management can be the most important aspect of bringing the best Internet service to students. "First, basic bandwidth is only one part of student housing Internet delivery," he says. "Experienced customer service support for residents and sophisticated adaptive bandwidth management are just as important to deliver a quality experience at a community. I think sometimes these items are thought of as one thing, and that is not quite the case. It is important to understand the difference between simply deploying a vast amount of bandwidth at a project and creating an overall quality experience for residents."
Campus Technologies' preferred approach is to source bandwidth at 'Tier 1" from providers such as Cogent Communications (Nasdaq: CCOI), closest to the heart of the Internet. They typically also deploy a proprietary edge management device that provides WAN optimization and edge caching to minimize latency and enhance the resident experience.
The company provisions Internet at a new high-rise property in downtown Baltimore, The Varsity at UB. "Downtown urban areas are the world's most hostile environments for Wi-Fi," notes Marshall. The Varsity at UB has around 400 beds and averages less than one trouble ticket per month for the last 12 months. We've engineered it with light out operation and redundancy along with remote management to reduce on-site intervention. Of course, occasionally you need to change a piece of hardware such as a wireless access point, but we design systems so that can be done by on-site maintenance techs in most cases."
Growing with the Industry
Most service providers agree that student living communities will continue to face challenges to providing robust high-speed Internet access, including higher bandwidth, greater density of users and devices, and evolving Wi-Fi standards. Texas-based RealPage, a leading provider of on-demand (also referred to as "Software-as-a-Service" or "SaaS") products and services for the rental housing industry, is tackling these challenges by continuing to design developments and retrofit communities to allow for future changes in wireless technology and bandwidth speeds while ensuring the owner and/or vendors budget for increasingly ephemeral Wi-Fi technologies.
"At a minimum, a community should provide additional, initially unused, access point locations, allow for the simple and cost-effective increase in bandwidth, and work with counsel to establish long-term responsibility for equipment upgrades," says Henry Pye, vice president, resident technology services, for RealPage.
According to Pye, the greatest challenge today is dealing with the ever-decreasing lifespan of network — especially wireless — equipment. "The continuous increase in bandwidth and the number of devices per resident has hastened functional obsolescence. The upcoming final ratification of the 802.11AC standard (a wireless computer networking standard in the 802.11 family, which is marketed under the brand name Wi-Fi) will exacerbate these challenges. When coupled with inadequate budgeting for upgrades by providers and/or owners, many communities will struggle to maintain an acceptable level of service."
Mark Scifres, CEO for Pavlov Media, the largest private provider of broadband services to off-campus student housing, says the budget for apartment owners really drives decisions on bandwidth and connectivity at property sites. Those willing to put in the right infrastructure and bandwidth will guarantee residents will be thrilled with their Internet experience.
"Demand for gigabit (1,000 Mbps) services to the unit is growing, and this requires gigabit switches," he notes. "However, many properties still use 100 Mbps switches, limiting the ability to deliver top-end speeds to residents. Today's wireless routers are still not gigabit Wi-Fi capable. In 2014, 10 gigabit switches will be available — that's 10,000 Mbps — and will require Category 6A or fiber optic infrastructure."
Pavlov continues to expand its 10 gigabit backbone network across the nation. The backbone allows for delivery of 10 gigabit capacity to individual properties. Scifres says bandwidth that allows high speeds of at least 50 Mbps or more per resident is necessary.
"This lets us deliver our Tesseractiv technology to residents with content delivered at speeds up to 1,000 Mbps (gigabit), which makes more efficient use of bandwidth and is specifically designed to improve video viewing on the web," he explains.
Baloga advises owner/operators to work with experienced student housing vendors from design through delivery and beyond. He says they often see inexperienced operators and vendors trying to deliver wireless services in ways that are simply not designed for the densely packed air space in which the student resident lives.
"We see quite a few owner/operators trying to deploy services on their own or trying to work with vendors who have very little true RF (radio frequency) design and operation experience," he says. "Let's face it, today's residents are the wireless generation, carrying more wireless enabled devices than ever before. If wireless is available at a property, they will choose to connect 80 percent or more of their devices in that way. Delivering quality wireless service is critical to the success of today's student community."
Budgeting for Growth
Ultimately, when it comes to keeping technology services current and relevant, budgetary constraints often have an impact on owners' decisions, points out Greenwald. For many, traditional, basic cable company solutions may be all they can afford or understand.
"Forward thinkers understand that these solutions no longer address the quality, service or ever-changing demands of today's residents, and engage IT experts early on in the process to map out a multi-year strategy for each property, including budgeting for future technology upgrades that will be required to keep a property competitive," he says.
New construction offers more flexibility, adds Greenwald, who encourages owners and developers to deploy the most current "commercially-proven" technologies that address their particular properties' needs. One common issue is that many development low-voltage plans are using out-of-date practices, which do not adequately support the new demands placed on the infrastructure.
"Retrofits need to be physically site surveyed by professionals familiar with the new technologies," he explains. "Some existing infrastructure (wiring/cabling etc.) may support straightforward upgrades, while others may be cost-prohibitive. In most cases, out-of-the-box thinking is required. The addition of commercial-grade, property-wide (managed) Wi-Fi, surveillance systems (CCTV) and access controls go a long way to bring older properties up to an acceptable standard, thereby increasing resident satisfaction and retention and driving rental growth. Properly executed, technology can become a real profit-driver."
Partnering for Support
When it comes to their students, providing top-notch customer service has been critical for EdR. EdR recently purchased a minority interest in Elauwit Networks' business. Based in Charleston, S.C., Elauwit Networks has been in the broadband and network service business since 1989 but has shifted its focus to student housing for the last several years. In addition to Internet service, Elauwit installs and supports video services, surveillance systems and all low-voltage work for EdR properties and new developments.
"Anyone can provide technology, but Elauwit really steps up and puts customer service as their main focus," says Scott Casey, chief technology officer and senior vice president of strategic business development for EdR. "And we now have a technology company at our disposal for other initiatives and programs. We're partnering with them on other ancillary services that will potentially improve marketability for current and future residents, help reduce our expenses and generate additional ancillary income on an annual basis."
One property the companies have joined forces on is Granville Towers in Chapel Hill, N.C., which has roughly 1,500 students who have access to 1 gigabit of bandwidth. Elauwit monitors closely student traffic on any given day, hour or minute and, on average, they are using between 300 and 400 megabits of bandwidth at peak times. Just two years ago, EdR increased bandwidth at all of its properties to 100 megabits.
"For now, I feel comfortable with 500 megabits at any of our properties," says Casey. "And now prices are coming down significantly, so it's not a difficult decision for us to add more bandwidth where needed and not impact our operating costs."
Competitive bandwidth pricing in some rural markets is still high and has not come down. There is typically one ISP who is the predominant fiber owner or carrier and, therefore, can set rates at whatever they choose because there is no competition in that market, adds Casey.
"We're paying a much higher per bed/per month rate for the bandwidth at our property in Carbondale Ill., where in other markets, the cost per month is half that rate for the same amount of bandwidth," he notes. "But we all have to endure that because we're all in rural areas and have small markets where we still have to provide excellent Internet service for our residents."
The Preiss Company, the fifth largest privately-held provider of off-campus housing in the nation, based in Raleigh, N.C., also partners with Elauwit Networks along with other ISP companies, including Time Warner Cable, Northland Cable, Frontier Communications and several other regional carriers.
"Each market is different in terms of ISP availability," says Brian Reid, IT Systems Administrator for The Preiss Company. "What is available in Raleigh is not going to be the same for smaller markets. In Raleigh, we primarily use Time Warner Cable due to their experience as a large, national ISP and their ability to provide bulk high-speed Internet services at competitive prices. Elauwit Networks is another group with an outstanding support model and very competitive services."
Like most owner/operators, the greatest challenge for Preiss is keeping up with constantly increasing bandwidth demands due to the growing trend of Internet-based TV, movie, gaming and entertainment services like Netflix, Hulu and Xbox Live.
"The Internet is something we view as the biggest amenity we can offer as a student housing company," adds Reid. "Our goal is to provide a high-speed, fiber-based Internet infrastructure that is built to withstand the bandwidth requirements of the future while still being an affordable amenity. The majority of our sites are already using this model. We hope to convert the rest in the coming years."
The Preiss Company is currently in the process of upgrading two properties in Charlotte to a fiber-based Internet infrastructure. University Club at Charlotte and University Village at Charlotte are both serviced by Access Media 3. Once the upgrades are completed, the properties' bandwidth will increase by more than 800 percent, says Reid, and they will have extremely competitive Internet speeds for years to come.
— Susan Fishman