Global expansion: GST Telecommunications buys Whole Earth

Competitive local exchange carrier GST Telecommunications announced last week that it will acquire the assets of Internet service provider Whole Earth Networks in a $9 million cash deal.

For GST, the move is driven by the need for additional transport facilities and access to more customers. San Francisco-based Whole Earth is an established ISP with more than 14,500 customers and an expansive regional backbone in the Western U.S. GST will link Whole Earth's facilities to its own fiber network, which includes rings in the Bay area, Fresno and Los Angeles, Calif. GST also has long-haul facilities between Los Angeles and San Francisco with links to Las Vegas, Phoenix and Tucson, Ariz.

"If there's an ISP within that footprint, we can put their facilities on our network, gain economies of scale and cross-sell their customers," said Dan Moffat, senior vice president of sales and marketing at GST. "We're ready to expand our data strategy, and we see ISPs as a way of doing that."

The acquisition is just the most recent in what has become one of the hottest industry trends of late. One analyst characterized the CLEC/ISP connection as a pooling of talent.

"CLECs generally are Bellheads, but they share the cavalier mindset of the ISPs, and they generally have complementary skill sets," said Dan Taylor, director of telecom research for The Aberdeen Group.

GST is considering using Internet protocol facilities to carry voice, Moffat said but added that the access charges that could be involved in interconnection to incumbent carriers' networks could make it difficult to get service prices low.