TECHNICAL INTERVIEW: PRE-WIRING BUILDINGS

An Interview With Jason Welz

Vice President, Cox Business Services

Jason Welz

In March of this year, Jason Welz became head of Cox Business Services (a Bisnow on Business sponsor) for the Northern Virginia region, managing sales, marketing, and engineering for high speed data services to 400,000 customers, mainly in Fairfax. Originally from Detroit, Welz spent time in Florida co-founding a web startup, then moved to Time Warner, helping to launch their commercial broadband services across 40 markets in the country, and growing it from $7 million to $300 million in a five year period. He was recruited to Cox in 2004 to focus on small and mid-sized business, and now has about 80 employees. In June, Welz, though only 34, won the prestigious Pacesetter of the year award from a leading cable industry publication.

One of your missions is to make buildings more attractive to tenants because of pre-wired communications access. What’s typical for a building?
Usually when providers such as Cox or Verizon arrive, you’ve got a number of telephone closets from which the building owners have run basic Ethernet and voice cabling into a office suites. That's where the demarcation point is for us — the point to which we bring our infrastructure.

So what are the choices?
If we're working with a building owner at the time of original construction, they may want to bring more to the suites, such as coaxial cable for video services, since the cost of extra wiring at that point is marginal. Our preferred approach is to to sit down with building owners pre-construction to see what kind of tenants they're trying to attract, so we can help design things. An example we’re seeing more and more is flat panel monitors in common spaces and conference rooms. The new Lerner headquarters in Tysons has them on every floor, and being pre-wired makes it much easier.

Who makes the choice and when?
In new construction, it’s the developer or owner. In existing construction, it’s usually driven by the tenant, but the specs are driven by the landlord. They’ll tell us where we have to come into the building, how to interconnect to existing wiring, how we have to go up the risers and so forth.

You advocate a single-source connection for communications. Why do you consider that an advantage?
That way, customers don't have to go to a CLEC for phone service, an ILEC for their local loop connection, an ISP for Internet, and Direct TV or Dish for video. It might even include cellular service. A year ago several providers such as Cox entered into a JV with Sprint Nextel for wireless spectrum so we can now be a quadruple play and provide all services.

You also stress the importance of "physical diversity" and "redundancy.” What are you getting at there?
If you don’t mind my taking the example of Cox again, our network is completely diverse and independent from any other telecom provider. The incumbent LEC network, Verizon, goes through central offices, so just about every CLEC that leases their network is using the same infrastructure as Verizon. If you are a large business or building owner, you won’t really achieve diversity of sources by having Verizon and Cavalier in the building because they go through the same connection points. As for redundancy, if you're a large enterprise customer or even a small one, bringing in another provider gives you true redundancy. Say a central office in Herndon goes down and you also have a different provider in your building, since it doesn’t ride on that infrastructure, you’ll still be up in the event of an outage by another provider. That’s important today because much of what's riding on these networks is mission critical or related to homeland security.

You also argue that a facilities-based carrier has an advantage in servicing infrastructure. Why?
When a service provider owns their own infrastructure end to end, their ability to service it is much greater. If a CLEC leases infrastructure from an incumbent LEC, they are relying on that LEC for response to needs for repair and maintenance, so there may be a lapse in getting things done because it's hard to troubleshoot something that doesn't belong to you. A facilities-based provider may have hundreds of trucks rolling around the geography and can dispatch them anytime and troubleshoot down to a minute level because it built the physical infrastructure and knows it well.

What kind of insurance do telecom providers carry for building infrastructure?
When we bring our facilities to that telecom closet, we've got to be insured. We have workers in bucket trucks, we might be digging up someone's parking, there’s a risk of utilities being mis-marked, and so on. So insurance is important to the building owner and to a provider’s own people. Since we may be in there with equipment from other providers, our access agreements typically have clauses with insurance commitments regarding property damage and liability.

What’s the aesthetic issue about wiring?
Sometimes people disturb landscaping or blacktop or concrete and don't leave it the way they found it. Another problem is that a number of building owners have had bad experiences with certain wireless carriers who are no longer in business but left huge racks of equipment on their rooftops—sort of a spaghetti mess of wiring and cabling. When we first got here, we had owners who were hesitant to allow us in because they thought, “Here’s another carrier trying to get into the business that a few years from now might decide to not be in the business, and they’re going to leave us with useless infrastructure.” It hasn’t been a problem for us, because we are a 105-year-old company that people know will be around. But we've had to do education.

How quickly does wiring need to be done?
If an owner is up against a tight deadline to get permits released for things like occupancy and needs to turn on their phone lines for elevators or fire alarm systems, they like to see a provider that can turn on a dime. We had a situation where an owner had a commitment from a utility provider to bring dial tone and needed it for insurance requirements. They were in a permit jam which would affect their occupancy release dates, and they were paying a mortgage on a giant piece of real estate. They called our "joint trench account executive," whose sole purpose in life is to stay ahead of the curve on new construction permits and work with the builders, developers and utility engineering firms to be sure our infrastructure is there in advance of the building opening. So we were able to deploy quickly and get their phone lines for their security systems, fire alarms, and elevators ready so they could pass their inspection. Yet they had been told by another utility who they were waiting on that it would be another four to six weeks, which to them is a very long time based on the fact that these are buildings that probably have tens of millions of dollars tied up in them.

You have said that wiring can be useful in a down market. Meaning?
In a market where people have a lot of choices, the more amenities you have the more attractive your building will be. Telecom is an amenity, in the sense that some buildings will have fiber or wireless or other affordable broadband alternatives. And if it’s wired so you can have a number of providers, the cost of telecom in that building will be less than with a single provider because of competition.