Tag Archives: commercial real estate

Strip mall or industrial park, broadband drives commercial property values

by Steve Blum • , ,

Even the smallest businesses want fast, reliable and competitively priced broadband now. My barber has 100 Mbps service in his one-man shop so he can run an online business on the side. Dollar stores couldn’t exist without access to a global market for surplus merchandise. Those are just two neighborhood strip mall examples. Every sector of the economy depends on broadband to maintain fast, real time connections to customers, suppliers, partners and data centers.

Broadband access distinguishes one commercial or industrial area from another. The businesses that you’ll find in any particular industrial park, for example, are mostly businesses that have learned to live within the limits of the available bandwidth. The ones that out grew those limits have, for the most part, moved out. Some are surviving by paying for expensive, custom-built connections from major carriers or by kludging together wireless links, but most don’t have the money, time or knowledge to do that.

Clusters of smaller startups and talented freelancers develop where Internet service is cheap and cheerful. And fast. A good example is downtown Santa Cruz. Eleven years ago, it was a ghost town. Then NextSpace opened the first modern co-working facility and Cruzio started pumping bandwidth anywhere that anyone wanted it. Freelancers and shoe string entrepreneurs showed up, then remote offices for Silicon Valley workers followed. Now you have big high tech companies and venture capital-backed startups crowding in. And rents and congestion are going up. So the next stop, 20 miles south, is Watsonville, where enquiries for high speed, industrial grade broadband facilities – again, dark fiber with redundant paths to Tier 1 exchanges – are at an all time high and growing (and being met, in some cases, by the City of Watsonville’s municipal dark fiber network).

Broadband is the primary limiting factor for economic development in California. It used to be that industrial plants located where power was abundant and inexpensive, and railroad connections were close by. Now, it’s all about broadband.

Industrial, commercial Star Ratings produce broadband development roadmap

by Steve Blum • , , ,

Broadband infrastructure analysis has two primary goals: 1. figure out what’s available now and whether it meets needs, and 2. identify and evaluate options for further development. Last year, Tellus Venture Associates created the Star Rating tool to assess broadband infrastructure in industrial and commercial areas.

It takes into account available service and existing infrastructure, and compares it to a range of benchmarks, including commodity business-level broadband, enhanced “megabit” and “gigabit” class service, and dark fiber. It’s flexible enough to accomodate a diverse range of data sources, including standard California Public Utilities Commission broadband availability reports, system diagrams provided by small Internet service providers, and local agency records, such as conduit maps, and zoning and business license information.

We initially developed it to simply determine whether current industrial and commercial infrastructure and service matched up with local economic development objectives. In the Broadband Infrastructure Assessment and Action Plan we recently completed for the City of West Sacramento, we turned it into a forward looking tool, and used it to predict the outcomes of different broadband development scenarios.

The currently available commercial/industrial broadband service in West Sacramento rates one-half Star overall, with some census blocks in the 2 Star and 3 Star range. But there are several under-utilised fiber routes that pass through West Sacramento, and the city owns an extensive conduit system, including shadow conduit prospectively installed during public works and major private developments. We ran two more scenarios to evaluate how those assets could be put to use, and assess the economic development impact of doing so.

The results were dramatic. Just by putting existing, commercially available fiber to use, West Sacramento’s overall rating rose to a full 1 Star. When city conduit was factored in, it jumped to 2 Stars, with some census blocks earning 4 Stars and 5 Stars.

The overall rating is interesting, but it’s the specific parcel and census block evaluations that are now truly useful. The city, commercial/industrial real estate owners, and businesses and tenants now have, as West Sacramento mayor Christopher Cabaldon put it, a “dashboard” to drive decisions and implement specific projects.

City of West Sacramento Broadband Infrastructure Assessment and Action Plan, 30 March 2017
Presentation to the West Sacramento City Council, 5 April 2017

Comcast sucker punches business park startups

by Steve Blum • , ,

Ars Technica enterprised a fascinating story that perfectly illustrates the problem new businesses face when looking for commercial and industrial-grade broadband connectivity. Cable companies – in this case it’s Comcast – advertise blanket availability of their highest service tiers, sign up customers to long term contracts, and then don’t deliver because their plant doesn’t reach the location. Or they dither for a few weeks or months, and then come back with a demand for tens of thousands of dollars in installation fees.

The Ars Technica article highlights the challenges SmartCar faced when they relied on a promise of availability from Comcast’s website, and then moved into a Mountain View business park, in the heart of Silicon Valley. Comcast never fulfilled its promise, but had the balls to take a big deposit and then impose a huge penalty when SmartCar got fed up

After hearing Comcast excuses for months, [CEO Sahas] Katta finally got fed up and decided that he would find a new office building once his 12-month lease expires on April 20 of this year. Katta told Comcast he wanted to “cancel” his nonexistent service and get a refund for a $2,100 deposit he had paid. Instead, Comcast told him he’d have to pay more than $60,000 to get out of his contract with the company.

Comcast eventually waived the fee—but only after being contacted by Ars about the case. As for Katta, he can’t believe it’s “this difficult for startups in Silicon Valley to get Internet.”

Yes, it is that difficult, particularly in older business and industrial parks, where cheaper rents (not cheap – this is Silicon Valley, after all) attract startups. It’s also why cities are increasingly looking for ways to bring competitive dark fiber companies to town, or build gigabit-class networks themselves. In Santa Cruz, San Leandro and other Silicon Valley cities where municipally-led dark fiber projects are underway, Comcast – and others – have extended their systems to unserved businesses quickly and without upfront fees. Without that competitive push, though, companies either pack up and move, like SmartCar did, or don’t consider moving there in the first place.

Where consumer broadband leads, business follows

by Steve Blum • , , , , ,

Newark, California rates a solid “C” for residential broadband but drops to a red “D” or grey “f” in the working districts of the city.

There are two worlds of commercial and industrial grade broadband: the specialized business broadband companies and the major incumbent carriers. Analysis of commercial broadband availability in California’s East Bay region shows that many specialized providers want to compete, but can be limited in the scope of their services by basic infrastructure provided by the big guys.

The preliminary findings of the East Bay Broadband Report Card developed by Tellus Venture Associates were presented to the East Bay Broadband Consortium yesterday. On the one hand, ten companies offer business class broadband services in various parts of Alameda, Contra Costa and Solano Counties. Typical service offerings range from 25 to 50 Mbps in the more heavily populated and industrialized area west of the Oakland/Berkeley hills to 10 to 25 Mbps to the east and north.

However, as detailed in a study we conducted for the City of Leandro, the fact that a company advertises a certain service level does not necessarily mean it’s actually available. Competitive carriers do install fiber optic lines in places where commercial demand is demonstrated – usually by a corporate purchase order – but to a great extent they depend on leasing lines from major carriers.

When those lines aren’t available, neither is the advertised level of broadband service. The report card clearly shows that many industrial and commercial districts in the three counties rely on substandard infrastructure that often receives a grade no better than “D”. Sometimes worse.

This variability in core infrastructure points to the need to evaluate business broadband availability on a block by block, and even parcel by parcel basis when pursuing economic development projects. It’s also an opportunity for municipally-backed dark fiber projects, like Lit San Leandro.

EDA opens new source for broadband funding with $2 million for San Leandro conduit

The City of San Leandro will fill in key gaps in broadband availability in industrial and commercial areas, thanks to a $2.1 million grant from the U.S. Economic Development Administration. The press release is here.

As far as we can tell, this award is the first ever given by EDA for a community broadband project, with credit largely due to the City’s economic and business development staff. They worked closely with the EDA to develop the innovative framework required and to meet the stringent requirements of the program. Tellus Venture Associates assisted staff during the process.

The money comes from EDA’s Public Works Economic Development Assistance program. It will pay for 7.5 miles of conduit, which will be connected to the City’s existing infrastructure. The new conduit will make it possible for Lit San Leandro, a privately funded fiber optic system, to extend the reach of its 11 mile network to more than 18 miles. The work is expected to be completed within a year.

Lit San Leandro, the brainchild of Dr. Pat Kennedy, the CEO of San Leandro-based OSIsoft, offers dark fiber and lit broadband services up to 10 Gbps to businesses along the existing route. The City and Lit San Leandro are working in partnership, with the City leasing conduit to the venture.

Thanks to this project, San Leandro is home to the fastest library in California. The main library is connected to the Lit San Leandro network and has clocked speeds in excess of 300 Mbps. It can do even better – right now, the limitation comes from the ability of computers to handle high data speeds, not from the network itself.

The new conduit will largely complete the job of making 21st Century broadband available to San Leandro’s industrial land. The three areas targeted – Doolittle/Adams, Marina/Catalina, Alvarado/Teagarden – were identified in a study conducted by Tellus Venture Associates, which has served as a consultant to the City throughout the negotiation and implementation phases of the Lit San Leandro project.

The study resulted in the approval by the San Leandro City Council last month of a strategic plan for commercial and industrial broadband development. Other action items identified include bringing additional fiber and wireless access to Downtown San Leandro, offering business assistance grants for broadband projects and adopting broadband-friendly planning, public works and community development policies.

Learn more by watching the San Leandro “Get Connected!” video.

Industrial and commercial broadband action plan, strategy adopted by San Leandro City Council

Seven action plan recommendations and an overall commercial broadband strategy were unanimously adopted last night by the San Leandro City Council. The goal is to bring new jobs, businesses and shoppers into the City’s industrial and commercial areas by developing better broadband infrastructure and availability, and encouraging companies and consumers to take advantage of it.

The strategic vision and specific recommendations were developed by Tellus Venture Associates, working closely with City staff. Businesspeople, major employers, property owners, school officials and the general public were involved throughout the process, participating in online surveys, workshops, one-on-one meetings and other events.

The action items approved last night for implementation are:

1. Formalize and promote existing broadband-friendly practices.
2. Make broadband a standard planning review criterion.
3. Adopt a comprehensive open trench policy.
4. Pursue opportunities for lateral connections to major fiber routes.
5. Support Lit San Leandro on a nondiscriminatory basis.
6. Develop WiFi hotspots in Downtown San Leandro.
7. Support business connections to broadband service.

The City Council immediately followed adoption of the plan with approval for the Broadband Connection Business Incentive Program, which provides local businesses with assistance in connecting to high speed Internet service. The City will continue work on a formal open trench policy and is pursuing grants to fund the construction of lateral fiber connections to Lit San Leandro and other major trunk lines.

Tellus Venture Associates has advised the City of San Leandro throughout its broadband planning process. In addition to developing the commercial broadband strategy adopted last night, Tellus Venture Associates represented the City in negotiating an agreement with Pat Kennedy, a local entrepreneur, for the construction of an 11-mile dark fiber route through the City’s commercial and industrial areas, leading to the launch of Lit San Leandro.

Download the City of San Leandro’s commercial broadband strategic plan

Download the City staff report and action items for the 17 September 2012 city council meeting

San Leandro beats Google’s Kansas City broadband speeds

Press release from the City of San Leandro:

San Leandro, Not Google, Is Writing The Next Chapter Of The Internet

Source: Lit San Leandro

“As Google attempts to grab the headlines with its announcement tomorrow of a fiber initiative for Kansas City that will offer users connection speeds of up to 1 gigabit per second, Mayor Stephen Cassidy of San Leandro announced that San Leandro is staking its claim as the fastest city in the nation. San Leandro’s fiber loop, known as Lit San Leandro, became operational earlier this year, offering connection speeds of up to 10 gigabits per second. This is 2,000 times faster than the average U.S. connection and ten times faster than the Google fiber network planned for Kansas City. Moreover, the network will soon support ramping up the connectivity to 100 gigabits per second for businesses needing an even greater connection.”

Less than a year after the City Council approved the project, Lit San Leandro is delivering on its promise of providing fast, fiber optic broadband connections to local businesses.

More information about the partnership with Lit San Leandro is available here. Tellus Venture Associates assisted the City in negotiating and implementing the agreement with Lit San Leandro, and is currently completing a strategic commercial broadband plan for consideration by the city council.

San Leandro joins elite group of dark fiber cities

Source: Lit San Leandro

Lit San Leandro is putting fiber in the ground. A launch party attracted about a hundred out-of-town development prospects and local business people who heard about the project’s big picture benefits and the specific real estate opportunities it creates. The Hayward Daily Review and San Leandro Patch have good articles on the event. Patrick Kennedy’s Lit San Leandro blog also has good updates and pictures.
Speakers at the event included Sean Tario, the CEO of Open Spectrum Inc., a data center consultancy, Jeremy Neuner, the founder of NextSpace and Justin Reilly, a partner at Cassidy Turley commercial real estate.
This makes three Bay Area cities with municipal dark fiber networks: Palo Alto, Santa Clara and San Leandro. Palo Alto’s is a 41 mile network with about 60 primary customers, and many more secondary users buying lit service from the primaries. Santa Clara has 57 miles of dark fiber, a couple dozen primary customers (the biggest group being major data centers) and many more secondary users.

Lit San Leandro is a private venture with full City backing to build an 11-mile dark fiber loop through commercial and industrial districts. The City is contributing conduit access for 99%-plus of the route. Patrick Kennedy, a local entrepreneur and owner of OSI Soft, a major local software company, is installing the fiber and will run the system on a cooperative basis.

An interconnect to BART’s fiber network is already operational, and several other metro and long haul fiber networks either cross or are within easy reach of the Lit San Leandro system. Low cost, high capacity connections to Tier 1 Internet facilities combined with a large inventory of industrial and commercial properties is expected to attract data centers and other high technology, broadband-intensive businesses.

Tellus Venture Associates advised the City of San Leandro on the project and handled contract negotiations with OSI Soft. The City of Palo Alto is also one of our clients. More information on Lit San Leandro (including contracts), Palo Alto and others is here.