They typically cover services such as Internet access, data transfer, and local and long distance telephone services. Generally, the developer arranges for the initial meeting between the appropriate service provider and a new or prospective tenant. The developer is the initial point of contact in communicating the advantages of the preferred provider's services. Such varied and economically sensible telecom offerings can be valuable to developers when marketing their real estate projects. Savvy developers require, in exchange for preferred provider accommodations, that service providers share a portion of the gross revenues generated from their projects.
Residential development is currently an underserved market.
However, as the competition for business customers escalates, many innovative CLECs and ISPs are targeting the residential market, where there is much less competition. In general, the MDU market has been easier to service competitively, primarily because of lower capital expenditures, and therefore has enjoyed more robust competition and product offerings from service providers and equipment vendors. The MDU market has more often lent itself to competitive service offerings, relative to the SDU market, from private cable operators, CLECs and ISPs for two basic reasons. First, it is less costly to deploy private telecom infrastructure and a proprietary network in the MDU space because there is less network infrastructure needed per subscriber. Second, legal constraints and regulations that affect the SDU space make competition costlier and more complex.