VOIP Tech Chat → Re: Apartment buildings: Why don't they convert to VOIP?

> Too much liability if Internet fails

Solution. Buy blocked cell phones that still work on 911. Give them to the tenants and have them sign for them so you're absolved. I'd much rather dial 911 from a cell and have that mobility then a landline anyway.

That's not a solution; that is against the rules and will put the operator in hot water if something goes wrong.

With fixed VoIP it's possible for the operator to offer true E911, despite the rest of the system being VoIP. If the apartment building is big enough, the costs would easily be covered by the number of subscribers.

In fact, with this sort of arrangement it would be an excellent idea to bundle Internet and phone service together so you can ensure building-wide QoS to keep the phone calls clear.

The problem is you'll need to spend some serious money on lawyers to get the incumbents to back off and allow you to hold a monopoly on the building. I have briefly explored this avenue and decided it wasn't worth it and likely to cause more headaches and legal drama than good customers.

Would it be necessary to hold a monopoly on the building? If my apartment manager had said to me, "Hey, we can give you phone service for $5 less than the incumbent's basic line with all of the features," I'd have done it voluntarily.

If you want to be able to afford higher end equipment (such as a high quality channel bank for all the analog lines running to each customer), you'll need enough customers to afford the hardware, thus the need for a monopoly.

This is how others are doing it with new developments, and probably why a lot of buildings are DSL-only or cable-only.

Back in the post-divestiture, pre-1996 Telecom Act days, when LD was still a cash cow, I looked into this for the property management company I worked for. The proposal was to hire a local telecom contractor who would have assumed responsibility for the inside wiring and paid commissions to the property owner.

A monopoly may not have been required but managing cross-connects between two providers and the house cables would have meant a lot of monthly labor and logistical issues.

At the time we looked at it, there were too many unanswered regulatory questions that would have required a lot of legal time to resolve. We never got to the point of estimating capital costs, operating revenue and commission income.

Also, in HUD- and IRS-regulated properties, it's not advantageous to spend money on bundling cable and phone into the rent, because it can't be included in the reimbursement rate for Section 8 properties or the rent calculation for Section 42 and Section 8 voucher properties.

In higher-income properties, I am guessing POTS and Cable VoIP penetration is ever-dropping as most renters would already have a mobile phone. As the use of wired phones tapers down to a base of survivalists, businesses, people who don't feel lucky and old people, I doubt a landlord would find a profitable economy of scale, and if a contractor could find a business model to make it work, they would do so. Maybe there's a niche to be exploited.

You're so right about the competition with cell phones. Most of the calls that come into me from people I don't know from internet ads are from cells. That is just astounding since the quality is often terrible, they're distracted and can't focus on the call as they're out doing stuff, the phone being always accessible makes them tend to call first, think later...LOL. But they still use that instrument and one can never forget that. Definitely it would be harder sell to younger people who don't even use a landline. But they sure pay dearly for that convenience, especially if they want the "whole package" of voice, text and web access. Still most of them do not have long distance packages, they often don't have unlimited calling during the day and texting on a tiny kaypad is vastly inferior to texting on a computer keyboard. So there is a market but its smaller than it could be.

Metropolitan Assoc by any chance? Just curious as it seemed like they owned a ton of apartment buildings when I lived there in '93-94.

There are companies offering triple play into apartment complexes, student housing etc already. They are often selling it as a single choice solution, ie choose this or there is no other solution. A lot of newer apartment developers are going this route - at least in the South

No, I moved here from out of state. But M.A. still does own a lot of stuff in this market.

Landlords are generally not good at providing complicated services; they are much better suited to providing a captive audience to which others can sell, while the landlords take their cut.

For example, cable aggressively pursues contracts that require exclusive use of existing inside coax to keep the barriers to entry high for any competitors. There's your VoIP right there, in a lot of cases. And they do kick back to the landlord: They might offer one free basic cable subscription for every 100 units under contract, and if they achieve specified penetrations, they will pay cash back to the landlord on a sliding scale.

(There are exceptions; laundry is a big business, and a management company with a big enough portfolio can hire an appliance repair person at a reasonable cost who can deal with laundry as well as stoves and refrigerators. The place I worked for had one guy just to maintain laundromat washers and dryers and another guy just for tenant unit appliances. And of course an (honest) trained monkey can collect the money.

One crucial difference between appliances and VoIP is that you can maintain a stock of spare appliances and put O-O-O signs on laundromat machines that don't work, but when somebody's phone is out, they're just going to camp out in the apartment office until their phone is fixed.)