New CLEC puts all its eggs in DSL basket

In what appears to be a growing trend, NorthPoint Communications, a new competitive local exchange carrier, last week announced the availability of digital subscriber line service in the San Francisco Bay area. The company, headed by former MFS/WorldCom executive Michael Malaga, was created exclusively to provide DSL to small businesses through partnerships with Internet service providers.

Like another San Francisco area CLEC, Covad Communications, NorthPoint enables ISPs and corporations to offer their end users hassle-free DSL. NorthPoint will collocate DSL access multiplexers (DSLAMs) in incumbent telco central offices, eliminating the need for ISPs to make those arrangements or purchase alarm circuits from the telco for connection to their own points of presence.

A need exists for a CLEC that focuses exclusively on DSL because voice-based technologies typically do not meet the high-speed access needs of small to medium-sized businesses, Malaga said.

NorthPoint will use symmetrical DSL and offer speeds ranging from 160 kb/s to 1.04 Mb/s at prices from $99 to $199 a month. Users can migrate to faster speeds any time without site visits. The company worked with its vendor, Copper Mountain, for more than a year to design hardware exclusively for NorthPoint services, Malaga said.

NorthPoint will differentiate itself from other CLECs using DSL with its wholesale approach, providing network connection, back office integration and joint marketing, said Beth Gage, an analyst for TeleChoice. "CLECs like NorthPoint get to do what they do best by building a network, and the ISPs get to do what they do best by providing access to the Internet," she said.

"If anybody can wrestle copper lines from the telcos, it's CLECs like this," said David Cooperstein, an analyst with Forrester Research.

NorthPoint plans to launch DSL service to customers in Boston by June and several more metropolitan areas by the end of the year.

In the Jan. 26 issue of Telephony (page 57), the WANShaper in the figure should have been shown as part of the WiseWAN 200. Telephony regrets the error.