CDS Expands Wireless Footprint in Deal

Santa Rosa, CA-based Sonic.net is a regional ISP building a diverse portfolio of services for its customers in Northern California. Since the beginning of April however Sonic.net wireless customers have been transitioned over to a new provider.  CEO Dane Jasper announced in a blog post on April 4 that Sonic.net had sold its wireless division to fellow Santa Rosa-based ISP, CDS Wireless. Financial terms of the deal were not disclosed. 

Founded in 1996, Sonic.net started out as a telephone reseller and dial-up Internet provider serving California residents and businesses and has since added multiple services including high speed Internet, web hosting, and co-location. For video, Sonic.net currently resells DirecTV, and in September 2011 it filed an application with the California Public Utilities Commission to become a video franchise as Jasper plans to create a streaming video service. 

Until last week, the company also offered wireless broadband on a small scale basis, but it decided to divest these operations, opting to focus exclusively on wireline.  Jasper wrote openly about the decision on the Sonic.net blog.

“I hate wireless. Today, we sold our wireless network. It’s an issue of focus. We are focused on wireline services, and dealing with the success and growth of both Fusion (consumer service packages) and FlexLink (enterprise service packages). We are also working on our Fusion Fiber projects. Wireline is our future. And, wireless is difficult. So, we sold our hard-won wireless infrastructure, selecting CDS Wireless of Santa Rosa to take over our network.”

The move to sell its wireless division is not a drastic shift for Sonic.net as only 2 percent of its business is generated through wireless, and a majority of the company’s capital projects have been focused on expanding its fiber network.  The company began a FTTH build in and around San Francisco in 2011, and it is now offering 100 Mbps and 1Gbps Internet through its fiber network in Sebastopol, CA.

By contrast CDS is more wireless-centric, although it does offer customers DSL that it purchases wholesale from Sonic.net.  In acquiring Sonic.net’s wireless business, CDS expands its existing wireless broadband footprint to the west.  Currently, CDS’ network covers central Sonoma County, along with portions of Napa, Marin and Mendocino counties. CDS President Steve Carniglia commented on the added coverage Sonic.net’s wireless infrastructure will provide.

“It adds 10 transmission sites to our 47 and allows us to bump our transmitters up from 90 to 100. And most of the new sites are to the west, so now we can offer access all the way out to Bodega.”

Although on the surface it appears that Sonic.net is betting against wireless, that doesn’t tell the whole story.  Ultimately, the company did not want to put capital that could be allocated to its wireline operations into growing and maintaining its wireless business. Jasper believes the deal will lead to better service for the customers of both companies.

"CDS is focused on wireless, and as a result, I expect that CDS will be a better steward of the wireless network, services and customers. Sonic.net is providing the Internet backbone connection for CDS, so it’s a good partnership for us. We do the part we are good at, and they focus on their specialty."