Entries in Broadband (16)

Tuesday
Jul262011

NetBlazr: A Grassroots Approach to Delivering Broadband

Startup Offers Complementary Services to ISPs

At a time when private firms and municipalities across the country are busy spending over-$7b in federal stimulus to expand broadband access, a startup company in Boston is taking a unique approach to delivering faster broadband to small and medium businesses on a much smaller budget.

What’s so unique about netBlazr? A majority of its customers receive broadband access for free… Call me a skeptic, but generally when a business claims to give something away, it’s usually too good to be true, or worthless. In netBlazr’s case however, the broadband service truly is free, but customers must contribute to the build out of its wireless network.

NetBlazr’s cooperative network infrastructure enables it’s “freemium” business model. Here’s how it works: Interested businesses pay an upfront fee of $300 to install a node (router and system of radios) in their office building that allows point-to-point communication throughout netBlazr’s network of customers. The more nodes that are installed, and the more reliable the network becomes.  Co-op members that are content with basic services get broadband access for free, while those opting for premium services—dedicated circuits or higher download speeds (50-60 mbps) — pay a tiered-monthly rate.  

Jim Hanley, co-founder and ceo of netBlazr, stated in a recent phone conversation that despite ongoing fiber buildouts in Boston, most office buildings are still not connected to high speed offerings—leaving SMB’s seeking better quality Internet.  Hanley reached out to a number of IT departments at Boston businesses a few years back, and was alarmed at the high percentage of companies reporting low levels of broadband service. Soon after, netBlazr was formed.

The lack of affordable, high speed options for small businesses was viewed by netBlazr’s co-founders as a great business opportunity.  “If you are in one of the few buildings that are ‘on-net’ for competitive carriers like Cogent, Level 3, Veroxity, Abovenet, etc, you do ok. If you are in a nearby building that has only Verizon, your cost per Mbps can be 30x-40x higher. That's an enormous arbitrage opportunity,” Brough Turner, co-founder and cto of netBlazr, recently commented.

The cooperative infrastructure ultimately drives netBlazr’s growth. It purchases access to high-bandwidth, optical circuits from Congent Communications, and then dilutes the costs between its cooperative members—eight Boston-based companies thus far with six more lined up. The nodes scattered across the co-op members’ buildings provides the infrastructure that allows the reliable broadband service.

There is a clear grassroots, small-versus-big feel to netBlazr, yet its services are more complimentary than competitive to the broadband services of cablecos, ILECs and DBS providers. Its website even cautions perspective customers against cancelling services from their current ISPs. 

Turner recently clarified where he feels netBlazr fits within the current broadband landscape.  “We're offering an augmentation service. We want to be your co-primary provider, allowing medium and smaller businesses to afford the reliability that comes with having two upstream providers. That allows us to use an Internet support model, a freemium sales model and a coop model for our infrastructure, so our costs are radically lower than the typical ISP.”

Essentially, netBlazr is betting that SMB’s are willing to pay for their current broadband service, in addition to its own services, in order to obtain a faster and more reliable broadband connection. The premise of its argument is that one ISP cannot provide the level of service required by most SMB’s, and through its deeply discounted pricing, netBlazr renders using two providers affordable.

Taking on an additional cost, albeit only $300 upfront, may however be difficult for cash strapped small businesses.  Adding netBlazr’s services also implies another relationship for SMB’s to manage, at a time when companies are increasingly choosing bundled communications services.  Whether businesses will demand netBlazr’s services on a larger scale will become more evident as it communicates its value offering to companies in the Boston area, and the 50 U.S. areas to which it plans to expand.

To date, fourteen companies were interested enough to install netBlazr routers and radios in their buildings. Company management remains confident that this customer base will grow, and has its sights set high. “We are like Skype for broadband,” netBlazr proclaims on Twitter bio.  If SMB’s overwhelmingly agree, the company could have a very bright future.

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