Interview with Rich Berliner by Jennifer Fritzsche, Senior Analyst Wells Fargo Securities
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Jennifer Fritzsche: Great, thank you, (Crystal). And thank you everyone for joining us. Now that we’ve battled through most of earnings we’re getting back on our conference call circuit. And we’re really excited today to have Rich Berliner. Rich is the CEO and Publisher of Fifth Gen Media as (Crystal) went through. And Rich and I have known each other for a few years and I’ve attended many of his events, one more recently virtually.
Rich, maybe for those on the call, first of all welcome, and maybe for those on the call offer a little color on Fifth Gen Media and your focus there.
Rich Berliner: Thanks, Jennifer, appreciate it. And thank you for doing the virtual event recently and the other things you’ve done for us. So, yes, interestingly enough I guess this is a reinvention story. So, I spent the bulk of my adult like building out the cell phone networks around the country for the carriers and had an event with (Randall) Public Company until 2010 we had an event with the company and after that I consulted for a number of years and then try to cast about for what I was going to do next.
And I realized that there was a niche that wasn’t being filled and that was the discussion between commercial real estate landlords, owners and facility managers and the wireless industry. Because up until a number of years ago, say six or seven years ago, if you were in a large building in Manhattan somewhere or any major city and you didn’t have good cell phone coverage I think the play was for people to pick up the phone and say if you don’t do something for me we have 500 lines in this building we’re going to move to the other carrier.
And that would be at the time people – carriers were desperate not to lose subscribers and so they would run in and they put a system in if the client was important enough. And about two or three, four years ago when I got this going this was the beginning of landlords being in the position to put systems in the building that gave the tenants the ability to have cell phone coverage.
That was kind of the beginning of this. So, I saw a niche that the two groups really had never interacted except when the carrier was in the middle. And the carriers now made it very clear or at that point made it very clear that they were out of that business by in large. And they were going to seed that to the landlords who it would now be their responsibility to make sure this was working in their buildings if they wanted this kind of coverage.
So, I felt there was a need for an educational outreach and so we became, I started Fifth Gen Media to become the educational outreach between the wireless business and commercial real estate. And for whatever reason, maybe more luck than smarts, it caught on because the two groups now, especially in the COVID-19 era very much need each other and very much need to have that education passed back and forth.
So, because again I come from the construction end of the industry I knew almost nothing about social media, digital media, publishing a magazine but over the course of years we’ve learned our way through that and it’s been a real exciting opportunity to recast myself and start a completely new career.
And so at this point and time we’re thought of as the go to guys in terms of when people need information in the business about what to do when they’re building about anything connectivity, we’re the ones they look to.
Jennifer Fritzsche: Got it. So, we’ll get to COVID which obviously is a topical issue. But I just wanted to start by saying, asking you what are the key challenges to getting buildings wired up for full connectivity?
Rich Berliner: That’s a good question and the answer is how the business started in the beginning what gave me the idea to do this was sitting in the basement of a building in Jersey and didn’t have any cell phone coverage. I was trying to make a phone call talking to a number of people and couldn’t make a phone call, there was no coverage down there.
And I said to the guys I was sitting with, I said I wonder what somebody would do if they needed to – if a tenant came into this building and said I’ll rent this space but I have to have coverage so our cell phones work. I said I wonder what the building owner would do. We called the super over and the guy who was in charge of the build and we asked him OK there’s no cell phone coverage down here.
If somebody wanted to move in, what would you do? He said I guess I’d call AT&T or Verizon. And try calling the front desk of one of the carriers and see who you can get on the phone at a carrier. So, it peaked my interest to say look we can find experts in the business who can help you. And so the big challenge for commercial real estate folks at this time to get their building coverage is who do I trust?
I really can’t call up the carrier and say hey come down here and put a system in. I need to find it on my own. And I don’t know is that the guy who helps me put – (inaudible) and changes for my IT end of the business. Is that the company that provides us with our PBX systems in the building? Or is that that company that does (inaudible). One of the great challenges is resources.
Who do they call? How can they find the right resources? And also the level of expertise they need depending on what they’re trying to accomplish. So, in this day and age one of the absolutes in our industry is that if you’ve got a building of any size and somebody wants to rent and comes with their broker into the building. And the first thing that the broker does is pull out their cell phone and see if there’s cell phone coverage.
Or if there isn’t, the building sort of isn’t considered the Class A building just because the lobby is marble and the elevators are beautiful and there’s a security guard there. That Class A building designation now is do you have good connectivity, cell phone coverage, Wi-Fi, et cetera, et cetera.
So the challenge really is who do I trust? Who do I call? What do I really need? How important is it to my tenants? And those sorts of things, but, especially now in light of what’s going on this is critically important. And again the challenge is and what we try to do with the commercial real estate folks is create that connection that here is a batch of experts that you can call and you can trust to try to get you what you need once you do an analysis of what you need in that building.
Jennifer Fritzsche: Got it. And if we, Wall Street was to put the (cam) everything, if you had to estimate what percent of buildings are fully connected with the necessary equipment or what you deem necessary equipment. What would your guesstimate be? What percentage of buildings over I don’t know what 500 – what’s a good size to assume?
Rich Berliner: Yes, over 500,000 I think – those over 500,000 is really one of the benchmark that we use. And I’ve read numbers everywhere from 5 percent of building have the right coverage to 12 or 13 percent. But, I think it’s rapidly, rapidly rising even in light of what’s going on now.
In that, if you have people that are going to come back to the building, there are things now that are going to be more important and you’re going to have responsibilities. And all of the responsibilities are going to involve connection and connectivity and communications. So, you’re looking at a very small number of buildings that have everything they need in place.
There, probably there are buildings that are don’t have (lead) certification or not, don’t have e-glass on them that are getting most of their signal from the outside that’s coming in and the coverage is good enough for what’s gone on before. But the future is good connectivity in the building in all the areas and you’ve got a public safety piece of that too that goes along with that.
That you must be able to have the ability for someone to pick up their cell phone and call 9-1-1. That’s kind of table stakes to make sure that if there’s an emergency people can take of that. And then you’ve got the public safety, the police, fire and emergency aspect of that whole thing. But, the number at this point with perfect connectivity or really good connectivity are fairly modest.
Jennifer Fritzsche: Got it. And so when we ask about Wi-Fi capabilities in the building obviously more than call it 12 percent have Wi-Fi but does that need a total gut rehab too with PICO sales and small sales in a lot of these (inaudible) buildings?
Rich Berliner: Well, that’s an interesting question. Because there are a couple of answers to that. First of all we have something called Wi-Fi 6 coming which is more robust and will be – will give people greater opportunity going forward. So, but Wi-Fi technology isn’t something that they’re small boxes so we don’t need a gut to do – a full gut to do that.
But, Wi-Fi 6 is coming as a new technology for buildings but you have to step back a second before we look and say what kind of numbers does Wi-Fi cover? Interestingly enough I was having a conversation with somebody about putting in a new entry system into a building. And I (inaudible) new technology, it was a young fellow who was an entrepreneur and he said we have this new technology and people can come and they can use their cell phones to get into the building.
And I asked the question how does it connect? What does it ride on? And he looked at me like I had three heads, he was like what do you mean what does it ride on, Wi-Fi. And I asked, I guess I asked a killer questions which was well whose Wi-Fi? And still really had no idea what I was talking about.
Well you can’t go into a system in a building that needs to be secure and just find whoever’s Wi-Fi happens to be there and connect to it and expect for you to be to pass some cyber security system, some cyber security criteria. Because those are open systems and there are all kinds of mean people, I’ve talked about this for years.
You go to the airport, you open your compute, you using the airport Wi-Fi and everybody potentially around you has the ability to see what you’re doing. So, the ability for us to look at Wi-Fi and say OK the tenants then have Wi-Fi, the landlord needs to have Wi-Fi for their own uses in the building. And then you have the visitor Wi-Fi issue.
All of those need to be kept separate. And again many, many, many people now are going to Wi-Fi where you need credentials to get into the system and you have, it’s encrypted. Because you can’t just have open Wi-Fi systems and you certainly wouldn’t want to let an entry, a keyless entry system ride on someone’s Wi-Fi that you have no idea whether it’s secure or not in that situation.
So, the Wi-Fi challenge for the future is more encrypted Wi-Fi, Wi-Fi 6 and what we can do with that in these buildings. But, you’re talking, excuse me, levels of ownership of the Wi-Fi. Who owns it? Who’s managing it? And who’s watching it? And is it encrypted and is it safe. So, those are the considerations in there.
Of course every building has Wi-Fi of some sort. The question is whose is it and is it encrypted and safe?
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