By Carl E. Kandutsch and Stephen Mayo Published in January-February issue of Broadband Communities magazine

Click here to view/download the article in .pdf format as it

originally appeared in Broadband Communities magazine. Avalon, the first fiber-to-the-premises (FTTP) neighborhood, or fiberhood, in Georgia was recently announced in Alpharetta, a northern Atlanta suburb. Atlanta is the commercial hub of the Southern United States and America’s second most wired city. Alpharetta is known as the “Technology City of the South”. There is hardly a more appropriate location for Georgia’s first fiberhood than Alpharetta. Avalon, a $600 million mixed-use development, currently under construction, located on 86 acres, will be home to a mixture of shoppers, homeowners, renters, office workers, retailers, restaurants and hotel guests. Avalon’s owners, North American Properties (NAP), have placed connectivity as a top priority for all of its developments with Avalon leading the way. The Fiberhood Vision — Who needs a gigabit? The broadband concept for Avalon revolves around bandwidth, specifically, bringing gigabit service to every home and business within the development. “Gigabit service is a catalyst for economic development, and is crucial for future-proofing development,” said Mark Toro, managing partner of NAP. “With bandwidth requirements growing at more than 30 percent per year, this is the way to get ahead — and stay ahead.” From the consumer’s perspective, FTTP is a prime amenity because it provides access to Internet speeds over 100 times faster than traditional platforms. Gigabit service allows end users to watch TV online without buffering, instantly download movies and music, enjoy crystal-clear, high-definition programming and explore a constantly evolving variety of online applications, all in ways that were unheard of just a few years ago. For business users, the benefits of fiber connections are obvious, starting with the capability to upload and download massive data files and work securely in the “cloud” at unprecedented speeds. From the City of Alpharetta’s perspective, Avalon’s fiberhood means economic development. Nationwide, communities that offer gigabit Internet connections are seeing a boom in economic development. Since the announcement that Google Fiber was going to Kansas City, an onslaught of startups has flocked to the area, giving it the nickname “Silicon Prairie.” Google Fiber's recent announcement in Austin, Texas prompted AT&T to announce their own "GigaPower" FTTP program. Alpharetta Mayor David Belle Isle remarked, “Avalon is a game-changer. Nowhere else in Georgia can you get gigabit service to your home and nowhere else but Alpharetta can a business take advantage of this cost-effective way to future-proof operations.” From NAP’s perspective, numerous studies have shown that incorporating advanced fiber-optic infrastructure into a development can increase property values. All of these considerations were built into the Avalon vision of a fiberhood, conceived as a successful, sustainable mixed-use community bringing exceptional value to residents, the community and NAP’s investors. To achieve the Avalon vision, NAP’s senior development manager Michael Davis assembled an experienced team including telecommunications consultant Steve Mayo of Inteleconnect, development associate Will Casaday and Carl Kandutsch of the Kandutsch Law Office to help outline the technology plan and steps needed to implement it. Designing the Network The network plan for Avalon involved designing a custom-built infrastructure throughout the community including an open and scalable future-proof platform capable of delivering an unprecedented level of service to residents and commercial tenants. As an initial step, Mayo designed a state-of-the-art, fiber-rich on-site network incorporating a sophisticated low-voltage structured wiring plan. Crucially, the network infrastructure was designed and multiple runs of backbone and lateral conduit were installed so as to accommodate a second or even a third service provider in the event the primary provider failed. The plan included multiple overlapping fiber rings within the development, redundant access to local service providers, and redundant fiber paths from the Avalon site to the carrier interconnect facility located at 56 Marietta Street in downtown Atlanta, home of the Southeast’s largest Internet bandwidth data center (occupied by more than 250 telecommunications-related companies, 50+ carriers and 36 fiber providers). After identifying a complete set of technology hardware, software, products and services specifically tailored to the development’s retail, residential, office and guest components, the team’s next step was to select a service provider capable of and committed to achieving the Avalon vision. Selecting a Service Provider – Why Hotwire? NAP solicited service proposals for Avalon from a variety of service providers, including well-known cable operators and telephone companies. During the RFP process, the Avalon team met with plant engineers, wiring contractors, billing companies and customer service managers representing numerous potential providers. Several of those providers offered pieces of the overall vision, but not everything NAP was looking for. Where the team did not sense a commitment to create the unique experience envisioned for Avalon, service proposals were eliminated. Hotwire Communications, Ltd. distinguished itself from the crowd in several areas. First, from a technological perspective, Hotwire has the right service delivery platform, excellent back-office support structure and exceptional fiber backhaul transport infrastructure to connect Avalon to the world. Second, from an operational perspective, Hotwire is well-funded, knowledgeable and, while in the early stages of developing the greater Atlanta market, committed to creating model communities within the market in order to demonstrate its full capabilities. Third, and perhaps most important to the forward-looking nature of the Avalon vision, NAP is convinced that Hotwire understands the Avalon vision and is committed to fashioning a customized, comprehensive broadband solution tailored to make it a reality. Unlike most other candidates, Hotwire was willing to conform its business model to Avalon’s needs rather than requiring that those needs bend to an established provider model. Founded in 2000, Hotwire Communications is one of the nation’s leading fiber-optic communications providers specializing in multifamily communities. Led by an experienced, reliable and innovative management team headed by Kristin Johnson Karp, Hotwire is well-positioned to partner with NAP to make the Avalon vision a reality. One crucial asset Hotwire brings to the table is its private, fiber-optic, self-healing network servicing communities across the eastern United States in and around Philadelphia, New York, South and Central Florida and Atlanta. One strand of fiber has 19,000 times the capacity of a coaxial cable trunk and Hotwire builds 96 strands of fiber into each community. Currently, Hotwire brings a 10 Gbps connection to each property served, but its fiber network can be scaled up to 129 Terabits to accommodate any community’s bandwidth needs for the foreseeable future. Hotwire’s proprietary network includes more than 200 miles of fiber in metropolitan Atlanta, running from downtown to Alpharetta. The self-healing fiber backbone is completely redundant, providing 99.9 percent reliability. The Hotwire network will connect Avalon directly to the data hub at 56 Marietta Street in Atlanta, dovetailing perfectly with the Avalon plan described above. This direct connection to one of the nation’s largest data hubs will provide major benefits to all Avalon residents, especially business tenants. For example, Avalon retailer Gap, headquartered in San Francisco must backup each day’s data by uploading large files to one or more central servers located in California. This process normally requires hours of data transfer. Hotwire’s direct connection to the hub at 56 Marietta means that Gap at Avalon will be able to transfer massive data files directly and securely to its servers in a fraction of the normal time, bypassing the public Internet and minimizing reliance on third-party networks. Legal Challenges — Future-Proofing Avalon’s gigabit vision required future-proofing. Thus, NAP’s overall goal in negotiating an agreement with Hotwire was to sign a document that could be relied upon to ensure that the services provided to Avalon tenants and homeowners would remain state-of-the art over a period of time. Achieving this goal entailed striking an often delicate balance. On the one hand, advanced technology is relatively more expensive to purchase and install, therefore, the term of the agreement must be sufficiently long to allow the service provider to recover its initial investment along with a reasonable profit. On the other hand, a long contractual term is, by nature, problematic at a time when rapidly evolving technology tends to disrupt existing business models and render existing technological platforms obsolete. The challenge from a contracting perspective was to build into the agreement sufficient incentives for Hotwire to invest in future-proof technology while at the same time avoid locking NAP into the kind of long-term commitment that would undermine Avalon’s ability to offer its residents and tenants the most advanced communications services available in the marketplace. Another challenge revolved around the fact that Avalon consists of several distinct communities (multifamily residential, single-family residential, movie theater, retail and office), each has its own interests and priorities. For example, the single-family residential community within Avalon will be governed by a homeowners’ association, which allows individual lot owners collective control over the common elements of the community. Likewise, the business and retail tenants need the flexibility to manage communications services according to their respective needs. At the same time, Avalon retains a unique identity and remains a unified brand. That meant drafting an access and service agreement that would acknowledge the functional autonomy of each separate community while retaining, for the developer, enough control over the service provider’s on-site activities to protect the Avalon brand. Finally, contractual future-proofing involved contingency planning around the possibilities that the primary service provider could fail, or that one or more of the Avalon communities might in the future decide that competition among service providers is preferable to being locked into a long-term commitment to a single provider. Thus, the contracts were designed to facilitate the competitive entry of additional service providers following expiration of the initial term, including through use of access licenses rather than long-term easements and shared use of crucial infrastructure facilities such as conduit. Conclusion As of December 15, 2014, phase 1 of Avalon’s 500,000 square feet of retail is 90 percent leased, and the grand opening is scheduled for October 30, 2014. Every resident will have immediate access to a Gigabit Internet connection, and each office and retail tenant will have access to a connection of 10 Gbps or more, as needed, all at a cost dramatically less than market rate. Avalon provides a clear example of how ambitious, forward-looking real estate developers with a sense of civic responsibility can partner with cutting edge service providers to create a Gigabit community that realizes the great potential inherent in FTTP technology. Although only time will tell, there is every indication that even in today’s rapidly evolving tech environment, Avalon will remain on the cutting edge of broadband communities for the foreseeable future. To learn more about Avalon please visit www.experienceavalon.com. Carl E. Kandutsch owns and operates the Kandutsch Law Office in Plano, Texas, representing multi-tenant real estate developers as well as broadband service providers. For further information, please visit www.kandutsch.com, email This e-mail address is being protected from spambots. You need JavaScript enabled to view it or telephone (214) 427-5354