Kirby Buddy Pickle

Even during an economic meltdown, there are always a few service providers that feel extraordinarily confident — almost complacent — in their ability to rise above the tumult and succeed where so many others have failed. Velocita is one of them.

Velocita, the fiber optic service provider formerly known as PF.Net, seems to have a solid business plan. The company is led by former Teligent Chief Operating Officer Kirby “Buddy” Pickle as CEO and former AT&T and Global Crossing leader Robert Annunziata as chairman. Velocita also boasts a roster of heavy-hitter partners, including AT&T and Cisco Systems.

Finally, and perhaps most significantly, Velocita is privately funded.

“Being fully funded and being private is a wonderful situation,” Pickle says. “I like to say we have no bull market baggage. We were formed as a company really during what is a very difficult financial marketplace and we built the entire strategic plan within that context.”

Pickle joined the company in September of last year. His mission: transform the provider from its original premise as a network construction company into an applications-oriented, data-centric operation.

Part of the transformation included changing the company's name from PF.Net to Velocita, which is Latin for “very fast.”

“We do everything very fast,” explains Pickle, who has spent the last six months retooling Velocita's business strategy and building out a national network.

“We realized there was a very good chance that Velocita might be the last national network in size and scope due to the structure of capital,” Pickle says. That's quite a heady statement, though Velocita is indeed a rarity in today's flagging economy, when carriers are cutting back on network buildouts.

Of course, not every facilities-based carrier in the U.S. has been born with such a large silver spoon in its mouth. AT&T is both a partner and customer, paying Velocita an undisclosed amount to complete a 6300-mile network build over AT&T's rights-of-way. As part of that agreement, Velocita can sell dark fiber on AT&T's network.

“They're a great partner,” Pickle says. “They pay their bills every month.”

Velocita also secured the rights to purchase 7100 additional route miles of dark fiber from AT&T.

Meanwhile, Velocita recently struck a lucrative deal with Cisco. In exchange for purchasing $225 million in fiber optic equipment, Cisco will provide Velocita with up to $485 million in financing — not a bad deal considering the current market.

Owning its own facilities is crucial to Velocita's business plan. “If you are not facilities-based, you end up having your customers beholden to someone else, and that's a very bad situation to be in,” Pickle says.

Being facilities-based doesn't ensure success, however. Around the same time Pickle & Co. decided to focus on the applications market, the previously golden applications service provider market started to falter.

Now Pickle seems eager to distance Velocita from those failures. “Those people were always a part of our business plan, but not the target of our business plan,” he says.

Despite the demise of the dotcoms, Pickle says the company has not had to significantly alter its business model. “We really have always focused on good-paying, bandwidth-intensive customers,” he says. “We're focused on selling to certain customers rather than selling to everyone.”

Although Velocita execs don't have shareholders breathing down their necks, they do face the scrutiny of their corporate investors, which include Koch Industries, PF Telecom Holdings and Odyssey Investment Partners.

“They really participate in the process,” Pickle says. “I probably talk to each of my partners on a daily basis. In this financial marketplace I think it's very reasonable.”

Velocita may be only two years old, but Pickle speaks with the experience of someone who's seen his share of hard times. He recalls two other periods since divestiture — once in the ‘80s and again in the early ‘90s — when capital markets became difficult.

“I can remember when MCI almost went out of business and their stock was at $6, and then I can remember another time when new entrants could not get funding at all,” he says. “I would say this economic slump, while equally as bad on a percentage basis, may be perceived as being larger because there are more new entities being impacted very negatively.”

And while Pickle claims he hates to see the demise of any companies, he has adopted an almost Machiavellian-like philosophy about the whole thing.

“I see it as an opportunity for our company to move forward and perhaps move forward even quicker than we might have otherwise by taking advantage of assets that are available at prices that wouldn't have been available a year ago.”

Spoken like a true entrepreneur.