A Call for New Infrastructure

Since 1873, Cincinnati Bell Inc. has been the foremost telephone company serving the Southwest Ohio region. And, with 2,900 employees and upwards of $1.4 billion in revenue, the business’s reach extends equally far in an economic, social, and—most importantly—infrastructural sense. Cincinnati Bell has hundreds of offices spread across a rough circle encompassing 2,400 square miles, and it’s the primary task of the company’s active real estate team to see that the properties are efficiently managed to take the smallest bite out of overall revenue. This is becoming more challenging as telecommunications technology continues to shrink in size while growing more heat-intensive, so the team is challenged with looking for creative solutions while preparing the company for the future.

As Steve Holter, Cincinnati Bell’s director of corporate real estate and facilities, puts it, “We have 60 central offices, around 700 small buildings and large cabinets, and probably another 600 small cabinets that we need to maintain in an area of 14 counties. The needs definitely change depending on the seasons.”

Holter hasn’t always been a real estate professional, having originally graduated from the University of Washington with a pharmacy degree. But it was his sales experience in the pharmaceutical industry and later his transition to the real estate department at Coldwell Banker that gave Holter the diverse skills and technical knowledge necessary to later make the move to the telecommunications industry in 1999. “Cincinnati Bell has an extremely diverse portfolio of real estate—garages, telephone-switching buildings, downtown high-rises, owned and leased real estate, right-of-way real estate, pole-line easements—so someone with a broad real estate background, in addition to property management, was something that the company needed,” Holter says.

Milestones in Cincinnati Bell’s history have been as integral to the growth of the company as they have been indicative of the technological—and subsequent cultural—changes in its industry (see timeline above for full history). One such milestone occurred in 1983, when Cincinnati Bell reorganized as a holding company. This allowed it to diversify its key services to include Internet, data centers, and other programs supporting mobile platforms—but all these new areas of growth have meant a lot more logistical work for the real estate and facilities department. “Telecom equipment generates a lot of heat, and that heat has a negative effect on the efficiency of the equipment as well as on battery life, so HVAC is the most important priority,” Holter says. “Energy is a major expense in our budget, so we’re always looking to maximize our efficiency.”

In order to do this, Holter and his four-person team audit three or four of Cincinnati Bell’s facilities every year, ensuring that they’re functioning properly and within expected energy-expenditure projections. The team is also charged with minimizing maintenance expenses to maximize spending on revenue-generating telecommunications equipment. According to Holter, variable-speed motors and high-efficiency boilers serve to adequately reduce energy costs, and in the company’s smaller properties, the telecommunications equipment actually generates enough heat that boilers aren’t necessary, and hot water is provided by small water-heating units. “I’m able to eliminate a gas bill, for example, because I can utilize the side effects of the telecom equipment to not require a boiler,” Holter says.

New telecommunications technology also influences the kind of real estate Cincinnati Bell looks for, especially as more people switch from landlines to mobile phones and cloud computing. “I’ve been involved in a lot of disposition, especially when data centers started coming to Cincinnati,” Holter says. “In 2007–2010, I was very involved in helping CBTS and CyrusOne [Cincinnati Bell’s technology solutions division and the company it acquired, respectively] in setting up new data centers in Cincinnati. That was a large-scale project because those projects can run up to $1,000 per square foot for a tier-three data center.” The company is now also replacing its copper telecommunications infrastructure, used by landline telephones, with fiber optics, which are necessary for high-speed Internet but also five times larger than copper wiring.

“There is a different challenge every day,” Holter says. “You might have an office-related problem one day or a storm-related problem another day. There’s nothing you can take for granted here.”