NaviSite To Offer Dial-Up Outsourcing
By John T. Mulqueen
NaviSite Internet Services plans to outsource Internet dial-up services for
ISPs and competitive local exchange carriers. The company last week
announced GeoDial SP and said it will open the first regional dial-up center in
June.
The company plans to use an ATM network from WorldCom Inc. to connect
10 regional points of presence that process dial-up calls and let ISPs and
CLECs offer national Internet dial-up service.
NaviSite is using Signaling System 7 gateways to strip off data calls from
telephone central office switches and pass the calls through to NaviSite
access switches, said Jim Winkleman, NaviSite's chief technology officer. The
architecture allows a CLEC that is providing local service to avoid
overloading its switch with Internet dial-up traffic, he added.
Winkleman said a local exchange carrier must provide subsidies to a CLEC
terminating such a call. NaviSite plans to share that subsidy with any CLEC
that uses its service, he said.
NaviSite will be able to offer dial-up service at half the price that carriers such
as Uunet Technologies Inc. or other backbone Internet carriers charge ISPs
or exchange carriers, according to Winkleman. He said NaviSite's service will
be less expensive because the company does not have the hundreds of local
offices that Uunet had to build.
"We don't pay for dial tone from a CLEC's or LEC's switch. Rather, we
bypass the switch and only pay for reimbursing the CLEC partner, at cost,
for facilities," he said.
NaviSite will aggregate calls and route them across its ATM network to the
appropriate regional center for processing, Winkleman said. "ISPs pay a flat
fee for the actual number of users that went through NaviSite's network,
rather than paying for ports which they might not fully utilize."
Greg Cline, director of research at consultancy Business Research Group,
said the service will be attractive to voice-oriented CLECs that want to offer
data services-NaviSite's initial target customer base. After that, the company
will target regional ISPs that want to outsource their dial-up business, he said.
Only 7 percent of regional ISPs outsource their dial-up business now, but 19
percent of national ISPs do outsourcing, he said.
"NaviSite is taking advantage of the tiering that is going on in the ISP market,"
Cline said. "The pay-as-you-go model is a change and is appealing."
The company also understands some of the quirks in the Telecommunications
Act of 1996 and is taking advantage of them, as its plan to share subsidies
from LECs indicates, he said.
Other industry executives said this subsidy revenue will vanish in a few years
but is a great opportunity now to make a lot of money easily.
Jim Schwartz, vice president of broadband services at First World
Communications, a Southern California CLEC, said his company is
partnering with NaviSite, which has located Ascend TNT switches in its
offices.
As a certified CLEC, First World is permitted to connect to the local
exchange carrier's tandem switch and get the local telephone numbers it
needs to provide dial-up service, he said. But California does not provide for
the sharing of call termination fees.
First World will market GeoDial SP to regional service providers and ISPs,
while NaviSite will handle national accounts. If NaviSite sells a national
account in First World's market area, the company will split the revenue
stream, Schwartz said.
First World is a 4-year-old company that used to be known as Spectranet
International. Schwartz said it has a 50-mile fiber optic ring in Orange
County.
"NaviSite was great for First World because it provides a turnkey solution
and First World does not have to dedicate resources from its core business
of providing voice, video and ATM services," Schwartz said.
NaviSite's first point of presence will open in June in Los Angeles; others will
follow in Washington, D.C., New York, Philadelphia, Chicago, Dallas,
Houston and Seattle, Winkleman said.
ISPs can be connected to a dial-up PoP over DS-3 lines, Winkleman said.
The nationwide backbone runs at DS-3, but will be increased to OC-3 this
summer, he said. |
