FiberNet finding paths to growth

FiberNet, the interconnection, collocation and transport provider, is branching out in a major way, seeking to become a Voice over IP peering point, a professional services company and a major point of interconnection between legacy and next-generation Ethernet services.

Last week, the company announced a net loss of $2.5 million, slightly higher revenues for the third quarter of 2005, up $500,000 to $8.6 million. But FiberNet has its eyes on major new markets, said Jon DeLuca, president and CEO of the company. Through two new initiatives – its Availius subsidiary and Phonomenum voice peering platform – FiberNet is hoping to greatly expand on its current interconnection and transport business.

High on the list of interconnection possibilities is the growing demand for Ethernet terminations for all kinds of different traffic, DeLuca said. Last week, FiberNet announced its first STM-1 to Ethernet termination for FLAG, a long-standing customer. STM-1 is the SDH equivalent of an OC-3 SONET service.

“The tide is moving in a migration from TDM, legacy protocols, SDH, etc. to an IP and Ethernet format, not just at the network edge but also getting pushed back into the network core,” he said. “At the end of 2004, we built our own native Ethernet network in New York, working with customers to bridge the gap. We have the capability to do end-to-end Ethernet – point to point or point to multipoint VLANs or VPNs. But much of the world is still legacy – at one end of the world, they are still picking up an SDH circuit, but they are dropping it off as Ethernet. That is something we can do for them.”

FiberNet is well positioned in this market because it focuses on network interconnection, operating in the major carrier hotels. FiberNet operates in carrier hotels in major metropolitan areas, including two major centers in New York City, and has a SONET ring network traversing the U.S., linking New York, Chicago and Los Angeles, where it also operates an international gateway.

“The conversion [to Ethernet] only happened where they needed to interconnect =-- that’s our primary business,” DeLuca said. “We want to be at the forefront of this from a technical perspective. From marketing perspective, we will market it heavily. Just in the three days since we announced the FLAG deal, we’ve gotten some very positive feedback about the usefulness of the service.”

Its newest initiative, Phonomenum, is a technology platform that provides direct VoIP peering, to enable service providers to avoid using the PSTN for their VoIP traffic. The platform is built on a carrier-grade Elecgronic Mapping Number (ENUM) registry that works with all global numbering conventions and can support all major VoIP gateways, DeLuca said. That carrier-grade status differentiates Phonomenum from other voice peering fabrics such as Stealth, he said.

“Our platform is similar to Stealth but different,” DeLuca commented. “We hired one of the original providers of Stealth. We consider ours a carrier grade platform. Stealth has been an innovator in this area. We want to bring a platform that really brings carrier grade standards.”

Availius as a separate subsidiary enables FiberNet to capitalize on the professional services expertise it developed over the years in operating networks. The company announced the new subsidiary in October.