StarNet's Juno Strategy

Just days after announcing it was getting out of the high-speed Internet resale business, Starnet went back to its roots in a big way, signing a dial-up wholesale agreement Tuesday with the ISP Juno.

by internetnews.com Staff [December 5, 2000]

Last week, StarNet, Inc. announced that it would no longer provide broadband Internet connectivity, citing a lack of profits.

Reach for the stars
Tuesday's deal, the terms of which were unavailable, gives StarNet. bragging rights as a backbone provider to the third largest Internet service provider in the nation, Juno Online Services.

Michael Alonzo, StarNet senior account executive, said his company is looking forward to providing service to Juno's many customers.

"We are very excited about the opportunity to work with Juno," Alonzo said. "Juno is one of the largest and most successful ISPs, and it's gratifying that they've chosen us to be part of the extensive dial up network which their millions of users rely on daily." StarNet is the largest North American wholesale provider of dial up 56K V.90 Internet service with an aggregate user base, before its deal with Juno, of more than two million customers.

Wendy Rosenberg, Juno senior vice president of telecommunications, said Starnet's reputation and reach made the decision to sign with them an easy one.

"StarNet's large footprint and reputation for quality are two of the main reasons we selected the MegaPOP network as part of the system we use to provide Internet access to our customers," Rosenberg said. "This partnership will allow us not only to improve our geographical reach but also to continue to deliver the highest levels of service to our subscribers."

Pop across the world
With more than 1,200 Points of Presence (POPs) in the U.S., Japan and Canada, StarNet gives Juno deeper penetration into markets it hasn't already reached. That, and multiple POPs in cities where StarNet coverage overlaps Juno's existing network, gives Juno a chance to reach out to more customers.

At last count, Juno had more than 12 million registered subscribers. Of that figure, nearly four million are active users (people who use Juno's service at least once a month). The ISP was made famous by its free-to-pay upsell business model, which lured customers in with free Internet service and convinced them to upgrade to its premium, fee-based model that is priced at $9.95 a month.

Although it is labelled a "free" ISP, Juno is probably not in danger of following in the footsteps of other free ISPs like FreeInternet.com, 1stUp.com, and Spinway, which are all now defunct.

These free ISPs were largely responsible for the demise of StarNet competitor ZipLink, which went out of business this week after Spinway failed to make its payments. StarNet, while it did provide wholesale services to Spinway and still provides dial up connectivity to Netzero, doesn't rely primarily on the business for its revenue.

Russ Intravartolo, StarNet chief executive officer, said that despite the problems experienced in the free ISP market, dial up connectivity is still as popular as ever, with fee-based ISPs stepping in to provide service to customers that got onto the Internet via the free route.

"As retail ISPs evolve, customers will keep coming back for dial up connectivity," Intravartolo said. "I'm very bullish on dialup. And we believe we're one of three or four healthy companies providing wholesale connectivity for those retail ISPs."

—End