The Voice of Maine

One of the oldest ISPs in the U.S. is also one of the boldest, moving forward with high speed DSL tiers and now internet telephony, all in response to clear customer demand.

by Alex Goldman ISP-Planet Managing Editor [May 20, 2005]

Sure you've thought about how great it would be to offer 8 Mpbs / 1 Mbps service to you users, along with flat free voice telephony, but have you checked to see whether users would be interested? Rick Preti, vice president of marketing and product development for Biddeford, Maine-based Great Works Internet (GWI), says that there's an easy way to find out what customers want: ask.

"What consumers say is everything in this business," says Preti.

So when GWI was considering the viability of a phone service, Preti organized a focus group. He didn't tell us everything he learned from the group, but some of the findings were:

• Voice and data bundles are appealing
• Consumers switch when they get at least $15 per month in savings
• Non-GWI customers would consider buying GWI phone service
• A single bill is popular

Of course, to have a single bill, you need a good billing system, and GWI uses Platypus, which is now part of Tucows.

You also need a network. GWI's, which covers most of Maine and a large part of New Hampshire, can be viewed in detail in this interactive map. To offer the whole package, it helps to have the latest DSLAMs, which GWI acquired over a year ago (see GWI's Big Lucent Buy).

Then you need to decide what type of internet telephony you will deliver. GWI chose the kind that requires no CPE. Much like Time Warner Cable's Digital Phone service, GWI changes analog calls to digital at the CO, partnering with an unnamed CLEC from that point. "We deliver our voice calls to their switch," Preti says. The result is the cost savings of digital telephony without the CPE hassle.

Pricing has been carefully calibrated. In Biddeford, Maine, RoadRunner charges $39.95 for digital phone and $69.95 for 8 Mbps broadband. Verizon does not offer the bandwidth (yes, ironically, it doesn't have Lucent's latest DSLAMs), but a 1.5 Mbps/ 384 Kbps is available at $29.95 for each.

GWI charges $39.95 for the phone service and $44.95 for the 8 Mbps / 1 Mbps broadband, making it cheaper than RoadRunner and faster than anything Verizon offers.

The advantage of the partially analog option is that it works with existing technology. "It works with fax machines and alarm lines. It's like a traditional telephone to the user," notes Preti.

It's a new product and there's no uptake data available yet. "I'm on the edge of my seat waiting to see if it will take off like a rocket or be incremental sales," says Preti. "The initial 8 COs we're rolling it out to have about 3,000 existing customers." He's hoping at least 10 percent sign up in the first month.

Of course, customer demand was not the only reason GWI undertook this project. Regulation, hostile and friendly, was also a factor.

"The regulatory environment is changing," says Preti. "Loop prices are going up and we needed to expand our business model in order to continue to be able to afford to be a player. We're in a regulatory landscape carved out of the Telecommunications Act of 1996 (see CLEC). The FCC was lobbied hard by Verizon and they won back some of what they might have lost but if you're nimble and willing to take a gamble you can jump into telecom and use it to support the price of the local loop."

Consolidation could, perversely, help GWI. "There are fewer and fewer players in the market. SBC's buying AT&T, Verizon's buying MCI, and we're now providing the local phone line. It's our eleventh year in business, and it was a tough thing to pull off."

But GWI's using its own service. "I'm talking to you now on the GWI line."

That's something every ISP would like to say over the phone!

—End