With a focus on solid customer service, MegaPOP offers wholesale dialup access along with a range of complementary services.

by Jeff Goldman [January 25, 2006]

StarNet was first founded in 1994 as a retail ISP in Chicago. However, according to company president Russ Intravartolo, the ISP was approached soon after its founding by a long distance phone company that was interested in accessing StarNet's network on a wholesale basis. "That was the birth of the MegaPOP capability," Intravartolo says.

MegaPOP Voice: (888) 212-0099 sales@megapop.net

.To differentiate the StarNet retail offering from the wholesale service, the company launched the MegaPOP brand. "We went down both paths with both services until the late '90s, when we realized that we were probably far better at wholesaling," Intravartolo says. "So we sold our retail business to one of our wholesale customers, and focused solely on wholesale from that point."

In the years that followed, Intravartolo says, the company grew perhaps a little too quickly. "As a buyer of telecom services, we were required to sign some pretty lengthy, one-way contracts with suppliers," he says. "We had to enter into two- and three-year supplier agreements, while we had customers who were pretty large and that we didn't have a whole lot of leverage with, and we couldn't get the same terms from them."

US LEC acquisition
In 2002, Intravartolo says, one of those large customers went in a different direction, and StarNet found itself stuck with a lot of excess network capacity that it couldn't sell. "We spent a lot of time trying to restructure the company financially, and we weren't successful at it," he says. "So we filed for Chapter 11 in '02, and were able to negotiate acceptable terms with everybody."

Michael Alonzo, StarNet's Director of Business Development, says the company remained profitable throughout that process. "During the time we were in Chapter 11, we didn't really lose any customers or any revenue," he says. "In fact, it was probably the opposite, which I think is a testament to the quality of the infrastructure and the guys that were managing it the whole time."

Two years later, US LEC acquired StarNet for $1.2 million in cash. According to Intravartolo, US LEC had been one of StarNet's largest and most supportive suppliers from the beginning. "It just seemed like a natural relationship to take it to the next level," he says.

Improved services
The most significant effect of the acquisition, Intravartolo says, has actually been to reassure larger customers about StarNet's stability. "We were told by our marquis customers for years, 'You need to have a ticker symbol for a larger client like us to feel secure that you're going to be around,'" he says. "So when we announced that, it was quite a sigh of relief to find out that it was someone of the caliber of US LEC."

In terms of the customer relationship, Intravartolo says, US LEC has essentially left StarNet alone. "We've been operated, and we do operate, as an independent business unit," he says. "We all recognized the value of what we had, which wasn't quite the technology—it's the service, the people, and the ability to react to customer needs. And that's not something that anybody wanted to change."

In fact, Alonzo says, the support from US LEC has significantly improved the MegaPOP offering. "We've seen our quality become a lot better than it was when we operated by ourselves before US LEC acquired us, simply because now we're the soup-to-nuts provider in that area," he says. "So we've been able to bring in unique coverage that we didn't have before, in addition to making the quality even better in those areas."

Voice over IP
A new wholesale voice over IP offering will soon be added to the mix, using a business model similar to the dialup service. "What we've done is we've leveraged all of our back-end strengths to manage a technology, just like we do with MegaPOP, and we built a remote access nationwide footprint for call origination and termination," Intravartolo says.

Just as the company began with a retail ISP and expanded into wholesale dialup, StarNet first tested the technology through the retail offering VoiceEclipse. "Before we decided what our long-term plan was for voice over IP, we knew that at a minimum, we had to start at a retail level to understand that business," Intravartolo says.

In addition to the wholesale version, a private label version of the voice over IP offering will serve as a turnkey option, similar to a virtual ISP offering for dialup access. "You can be an instant voice over IP provider with your own brand, and not have to worry about any of the infrastructure that goes with it, including 911," Intravartolo says.

Owning the infrastructure
Alonzo says the pricing is extremely flexible for all of MegaPOP's offerings. "We look at every opportunity uniquely," he says. "Since we own and operate the infrastructure, we have the ability to be very flexible on the different types of pricing models we come up with. We can put together any type of pricing model the customer's looking for."

The only requirement, Alonzo says, is that any pricing model has to be a logical win/win for both provider and customer. "We have a true understanding of what our cost is down to the minute, per minute, per port—and with the right-sized opportunity, we just do a cost model, understanding what our true costs are, bundling in overhead and everything else," he says.

Along with the wholesale dialup offering, a range of additional services is available, including SlipStream's accelerator, filtering, e-mail, personal web space, colocation, and more. The company's complete VISP offering packages all of the above in a single solution.

Real live techs
Eric Holtzman is President of Chatsworth, California-based 4 Less Communications, which runs both Dialup 4 Less and Hosting 4 Less. According to Holtzman, the company uses MegaPOP for the vast majority of its dialup access, working with other providers only for specific locations in remote areas.

Holtzman first found MegaPOP, he says, by reading through ISP-Planet's Wholesale Dialup Directory—and he decided to work with them after a sit-down meeting with Alonzo and Intravartolo. "We talked, and we basically just clicked right from the get-go," he says. "And since our inception with MegaPOP, they've been nothing but great."

Key strengths of MegaPOP's offering, Holtzman says, include reliable service and solid tech support with quick response times. "If there's ever a problem, which is very, very rare, they have real live tech guys that are there and very easy to talk with," he says. "They actually resolve their tickets the same day, within hours instead of days—which makes us look better, of course, to our customers."

— End

Related articles:
	[Sept. 24, 2001]	When Wal-Mart Sells AOL Dialup for $9.94
	[March 16, 2001]	Va-Va-VISP
	[Nov. 27, 2000]	How to Pick A Wholesale Access Provider

Online resource:
	Wholesale Dialup Directory