Neon lights up New England: Another carrier's carrier in the local market

Although most competitive access providers have added switches to become competitive local exchange carriers, one former CAP has chosen to become a carrier's carrier, filling the fiber needs of companies competing directly for end users.

NorthEast Optic Network, formerly FiveCom, originally built a fiber network in 1989 to connect several colleges in western Massachusetts. At that time, President and Founder Victor Colantonio negotiated a deal to use rights of way from the local electric company.

Later, Colantonio leveraged that relationship to use Northeast Utilities' rights of way throughout much of New England. The company decided to sell its CAP business to Brooks Fiber and invest the returns in building a regional fiber network. It has since obtained additional funding through a private placement snapped up by Northeast Utilities and Central Maine Power and more recently, through a public offering.

Neon's strategy is similar to that of Metromedia Fiber Network, another carrier's carrier targeting the local market. But while Metromedia is building in several large metropolitan areas nationwide, Neon plans to focus only on the Northeast.

"Our objective is to go deeper and deeper into the base and deliver service further into the community," said Colantonio.

And while Metromedia offers only dark fiber, letting customers install their own transmission equipment, Neon is using just one-third of its network to support a dark fiber offering, said Colantonio. A third will be sold as lit fiber, and a third will be kept in reserve.

Last week Neon announced customers for both offerings.

Network Plus, a long-distance carrier that has entered the local market as a reseller and is building its own local network, purchased a dark fiber route linking several markets.

"With dark fiber, we control how rapidly we deploy the optronics and electronics," said James Crowley, executive vice president and CEO at Network Plus.

HarvardNet, a CLEC emphasizing digital subscriber line, purchased an OC-3 (155 Mb/s) link connecting several cities to deliver traffic to Internet service provider peering points. The company will use it to support an asynchronous transfer mode network running Internet protocol.

"No one else has really built a regional backbone in New England," said Bill Southworth, chairman and CEO of HarvardNet. "The national [ISPs] just backhaul traffic from wherever their systems are going."

Compared with railroad beds, which may contain fiber from multiple carriers, electrical rights of way provide an edge, said Colantonio.

"Often, we are not located in rights of way that are shared by other telecom companies," he said. "We offer true geographic diversity."