2017 has been the most profound year in technology for both HOA & COA communities, as well as for REIT communities.
The onslaught of deeper penetrations of residents using high-speed internet has doubled in the last 3 years. Communities that saw a 40% penetration level are now at 70-80% and climbing even further.
Last year CCG negotiated for thousands of residential units and over 200+ new community contracts, including bulk, marketing partnerships, and right of easement agreements. We saw multiple communities which had never thought about a bulk high-speed data contract before, sign up for them gladly at 60% savings off the retail rate. Communities which had never even thought about video bulk contracts before were now considering bulk data contracts.
The difference today in Communities across the country is that no one really cares where you get your High-Speed data (unlike TV services like DirecTV vs. Comcast for example because each is different.) With data, they only care that it works, if it’s fast and that they are saving money.
Communities which have never had bulk high-speed data are now getting offers for 100-150 megs of data “always on” with no limits for half the price if not 60-70% of the price with Bulk Community Contracts. These contracts include upgrading the community with fiber optics, and guarantees for services as well as a sincere partnership between the service provider that wins the deal and the community in which the provider is serving.
INTERNET HOUSEHOLDS IN THE US
As of the end of 2016 Wired Broadband subscribers were right at 68/69% in every household! 2017 numbers are not in but are expected to be around 72/73% of every household in the US will be a high-speed internet subscriber!
We only see this trend continuing to provide opportunities for the cable companies, telephone companies, and broadband companies as well as advantages to the HOA/COA and REIT communities.
THE SERVICE PROVIDER ADVANTAGES
They now have long-term dependable revenue under new Bulk contracts that guarantee revenues or even just as important, Sincere Marketing Partnership Agreements that allow choice in the communities they serve. These agreements also add protections like “anti-bulking language” so that a 1,200 unit HOA doesn’t suddenly sign a 100% bulk data contract and take all the customers away from the winning Marketing Partner Provider! We are seeing more and more Bulk Data Contracts that suddenly result in an existing provider losing almost 100% of the community business that does NOT have these protections! CCG’s team personally witnessed over 22,000 such units under 10-year contracts meaning a loss of over $150,000,000 in valuation for the incumbent providers!
THE HOA/COA and REIT COMMUNITY ADVANTAGES
Across the US each community now has many more service providers trying to earn some, if not all of their residents’ business within the communities! The choice is now real! Bulk Contract Choices, Marketing Partnership Choices and even Right of Easement Choices! More choice can mean more savings and even revenue back to the associations for permission to service their community and even more for forming Marketing Partnerships with them. In each of the opportunities is the opportunity for a community to get their network upgraded and ready for the latest in technology. 1 Gig Services are right around the corner and it is critical for the board to get the service providers to upgrade their networks in these agreements…If not…the community down the street will get the guarantee and not the one that doesn’t know how to negotiate for it correctly.
Board members and real estate investment owners need to understand that technology contracts of the past are not the technology contracts that they need to be signing for the future. Future proofing, value, and revenue for their investment properties and for the board that serves the residential HOA and COA across the country need to pay attention to these items! CCG can assist as the leading expert in these types of contract negotiations.
From the President’s Desk-
Communications Consulting Group Inc. Formed in 2004 as a National Advocate Home Owners Associations and Real Estate Investment Associations. The CCG team is made of skilled Attorneys, Former Comcast, Hotwire, ATT and Charter Communications Executives working on behalf of the Communities They Service in over 48 states.