Lucent boosts Jato's DSL liftoff

Jato Communications, a new data competitive local exchange carrier, has entered the digital subscriber line market with strong support from Lucent Technologies. Targeting under-served markets in 14 states, Jato will roll out services in three or four areas by the end of 1999 and in a dozen markets in 2000.

Jato's second-tier deployment strategy lets it avoid competing head-to-head with national DSL providers such as Covad Communications, NorthPoint Communications and Rhythms NetConnections.

"We wanted to be the bigger fish in a smaller pond," said Brian Gast, president and CEO at Jato. "There's lots of attention in the top-tier markets. We saw more opportunity in being the first-to-market in other areas."

Lucent, in an agreement worth $50 million over seven years, will engineer, design and maintain Jato's network infrastructure. "After looking at the DSL market last year, we became confident that the small and medium-sized business space was a key area for Lucent," said Linda Manchester, director of DSL.

Although Lucent is working with other DSL providers, Jato appears to be its showcase client for the moment.

While Lucent concentrates on maintaining and monitoring the network, Jato will provide service and marketing to its channel partners. "Our partner plans and programs are built around providing market and sales qualifications," said Gast.

Jato's DSL service is designed for small and medium-sized businesses, and the deployment is expected to reach 80% to 85% of business customers and 60% to 65% of residences within its target cities.

Though adding another competitor, one NorthPoint official viewed Jato's entry as a positive move for the market. "It's a confirmation of DSL as the technology of choice," said John Stormer, vice president of marketing at NorthPoint.

In related news, the ADSL Forum plans to provide more confirmation and support for the technology. With DSL's adoption rate lagging behind cable modem services in the residential market, the forum has designed a "Hook Up America" campaign to educate and promote DSL throughout the country.

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