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Finding Money in the Basement

"Oxford Development is a big player in real estate in the state of Pennsylvania and in Pittsburgh," explains Pittsburgh-based Telerama CEO and founder Doug Luce. "It was a real coup to have them approach us and ask us to bring Wi-Fi into One Oxford Center."

Luce says that Oxford had heard of Telerama because of "the cultural district project." Telerama put Wi-Fi into a 14 block area of downtown Pittsburgh (see company press release here) for ONE UNWIRED DAY, September 25, 2003. The district includes a concert hall, restaurant, and other important buildings.

"Oxford had spoken to a few people and they seemed to like us."

That's how Telerama got involved in bringing Wi-Fi into a 45 storey one million square foot office building. So far, Telerama has connected the lobby and the basement's food court.

Luce is optimistic about the potential of the building. "There are many businesses in the building, from small businesses to multifloor law firms. 2,000 people work in it and another 1,000 visit it every day."

He wants the building to work because he believes that people in the real estate business are wrongly skeptical of Wi-Fi. One company he spoke with said they'd installed fiber optic equipment in the building and then tenants came in and either did not care about bandwidth at all or did not use the fiber optic that was provided. "Tenants usually hire someone to put something in and manage it," Luce says.

Telerama shares Wi-Fi revenue with the property management. In this case, Telerama shares a relatively generous 33 percent of revenue. "They also get free DSL, and we offer everything we can do as an ISP to management including webhosting, dialup, e-mail, and discounts on home DSL too." (Oxford did not take the home accounts.)

Oxford paid an installation fee, and Telerama provides marketing and help desk support. Telerama monitors channel use, looking for misconfigured laptops, and can help end users reconfigure their computer if there are problems. Telerama handles subscriptions and signup.

One key to getting a real estate account, Luce says, is demonstrating an ability to stick to the budget. Telerama uses open source software and older computer equipment to build relatively cheap hotspots (see No, it Costs $50 to Build a Hotspot).

Telerama has survived since 1991 through a simple philosophy. Asked about ROI, he responds eloquently. "To figure out ROI for anything, you need to know what your income's going to be," explains Luce. "I'm in this because I know I can do it on a shoestring budget. I can invest little money and provide good or better service than the companies that run $100,000 per site. The ROI's not certain, but I have faith, and that's what this is all about. In the early days of the Internet, who knew anyone was going to use it? It took some faith it would get to be the way it is today, with grandma online sending photos."

Reprinted from ISP Planet.