Speakeasy Speaks Up

What's it take to operate a successful non facility-based broadband business nowadays? Savvy service differentiation, a climb-any-mountain attitude, and a passion for delivering high-speed access better than your competition.

by Patricia Fusco ISP-Planet Managing Editor [April 11, 2002]

Digital subscriber line (DSL) service is the bane of residential broadband access in the U.S. It's like dealing with the devil for the average independent ISP operator, since provisioning DSL feeds often requires climbing into bed with an incumbent carrier. Residential users wrongly associate DSL access with quirky self-install kits and waiting on permanent hold for substandard technical support. Members of the investment community equate DSL access with financial ruin, since it's the broadband technology behind the business plans that brought down NorthPoint, Rhythms, and to a certain extent, Covad Communications.

How could an ISP operator possibly profit from building a broadband business around DSL access in this environment?

According to Mike Apgar, Founder and Chief Executive Officer of Speakeasy.Net, success is derived from a never-say-die mindset capable of overcoming nearly any obstacle. He should know. Since Speakeasy.Net was founded in 1995, Apgar has seen more than his fair share of disasters.

"Originally, we opened up a 5,500-square foot Internet Café with high-speed access, an art gallery, and a small theater," Apgar explained. "We thrived during the dot-com boom since we built our business around technology-related events in Seattle as an Internet cafe and broadband service provider."

And thrive it did. Speakeasy became one of the places to be in a state that Microsoft calls its backyard. Innovations in the company's business plan abounded. In 1996 Speakeasy launched RainMail, allowing its members to access e-mail and surf the Internet on recycled text-based terminals installed in popular bars and cafes around Seattle. An acronym for Remote Access Internet Node, RainMail formed a natural bond with the locals and the area's rainy disposition.

As Speakeasy gained name recognition in the greater Seattle area, it became a traditional ISP in September 1997 and started providing standard dialup connectivity to residential users. It was only natural for Speakeasy to add residential DSL access to its mix early in 1999—a service that remains its most popular offering to date.

In July 1999, Speakeasy initiated a massive expansion of its service offerings. The company blossomed from dialup service and DSL access to offer e-commerce solutions and webhosting services in 18 major cities across the country. Backed by Covad, the largest national provider of DSL connectivity at the time, the sky was the limit for Speakeasy.

Right about then, the popularity of DSL access and the demand for it began to fade in the U.S. But while the broadband industry tried to rebound from understaffed call-centers and ill-prepared back office support, Speakeasy maintained its stellar reputation for excellent technical support and customer services with the debut of "MySpeakeasy." Initially a place to make payments online and view the status of would-be customer's order processing order, MySpeakeasy—Total Account Control (TAC) evolved into a complete billing and customer support solution.

Apgar said that over the next two years TAC became the contact method of choice for Speakeasy's customers. "MySpeakEasy" is also one of the reasons why customers stick with Speakeasy, too. That, and its ability to innovate while other broadband service providers were stagnate with installation delays and order processing.

But all was not well in the broadband service arena at the end of 2000. In December Flashcom Communications, Zyan Communications, Relay Point and FastPoint filed for federal bankruptcy protection. Succumbing to financial pressures, the defunct broadband service providers eventually abandoned thousands of DSL users across the nation and their unpaid fees harmed the DSL providers themselves, especially Covad, NorthPoint, and Rhythms.

Not so for Speakeasy. The company introduced a new residential DSL service that allowed customers to set up connections over their primary voice line in August 2000. Apgar credits the line-shared DSL service with drastically reducing the time it took new users to connect with Speakeasy—down from an average of 30 days to just 12 days.

Early in 2001, while rumors about NorthPoint and Rhythms NetConnections financial resolved swirled about the country, Speakeasy followed-up the success its line-shared DSL service with a self-installation kit at further reduced provisioning time for residential users. Of course, the wait is even shorter today.

"What originally took as long as two months to setup was reduced to 30 days when we introduced our line-share DSL service," Apgar said. "Then we introduced our self-installation kit reduced this to somewhere between 10 and 14 days to new residential customers. Now, we can connect customers within 2 to 4 days from the time their service order is approved."

But the wholesale DSL market meltdown of 2001 wasn't the only threat Speakeasy had to overcome last year.

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