Backbone Directory: Sonic.net

Sonic.net uses economies of scale to help smaller ISPs offer DSL to residential and business customers in California.

by Jeff Goldman [May 31, 2006]

Current Network Info

Sonic.net was founded in 1994 in Santa Rosa, California, making it an industry pioneer. Today, according to President and CEO Dane Jasper, about 65 percent of the company's business is focused on DSL end-user access for consumers and small to medium sized businesses—the company, he says, is now AT&T-ASI's third-largest non-affiliated partner.

Jasper says Sonic.net now has one of the largest ATM footprints in California. "We've taken that platform and pushed it over to the wholesale side," he says. "Today, about 10 percent of the customers on our network are affiliated with one of the 58 Internet service providers who we have partnered with to provision DSL."

The business proposition for those ISP partners is extremely straightforward—it's all about scale. "You have to be big before the costs get reasonable, and if the costs aren't reasonable, you can't offer the aggressive introductory rates that today's market demands," Jasper says. "And so we're lending our economies of scale to ISPs who are in the 1,000 to 20,000 customer count range, who really can't make the huge-scale push that we've made in order to build an economic network."

Working with Sonic.net, ISPs can currently deliver 1.5 Mbps, 3 Mbps and 6 Mbps DSL products to their customers, with additional offerings planned for the near future. "We're anticipating that the network will also enable the delivery of T1 products, Nx T1 products up to 18 Mbps, and Nx DSL circuits that will deliver up to 24 Mbps," Jasper says.

Today, Sonic.net covers six of California's ten LATAs (see coverage map). "Sonic.net's footprint includes all the major metro LATAs in the state of California—Los Angeles, Sacramento, San Francisco and the greater Bay Area and Silicon Valley are the big three LATAs in this state," Jasper says. "And we're also covering Stockton, Salinas and Chico LATAs, so that gives us coverage throughout most of the state."

In the future, Jasper says, the company plans to extend into the remaining California LATAs and into Nevada and Texas.

Wholesale from an independent
The wholesale offering, Jasper says, is a perfect solution for both Sonic.net and its ISP partners. "I don't have any customers in Chico, but I have network in Chico," he says. "And there are eight ISPs in the Chico/Shasta/Redding area that we partner who do have lots of customers in those areas. So it's really a win/win situation, because they're able to keep their customers at the kind of economics that have allowed us to deliver DSL at very low, very aggressive market rates."

Jasper currently serves as President of the California ISP Association, which he says gives him an immediate sense of the challenges that smaller ISPs are facing. With cable companies and incumbent LECs dominating consumer broadband access, many small ISPs are suffering—but Sonic.net's partners, Jasper says, are doing well. "It's kind of like the heady days of the late '90s when we were growing madly—and it's pretty exciting," he says. "These ISPs that are partnering with us are revitalizing their businesses by leveraging our business model."

The economics, Jasper says, are simple. If a small ISP buys a couple of ATM T-1s from AT&T-ASI for about $2,000 a month to serve 100 to 150 DSL customers, then adds the cost of the DSL loop to the end user's home (say, $10 to $15), the cost to the ISP to serve each end user would range from $20 to $30 a month before paying for upstream.

"But when you're big, when you have 10,000 customers, you're spending a couple of dollars per customer in ATM first mile costs—and that, added to the last mile costs of $10 to $15, allows you to deliver an introductory product for $14.95 and break even at it," he says.

When working with Sonic.net, Jasper says, an ISP buys a DSL end user loop directly from AT&T, then buys ATM and IP transport from Sonic.net. One key benefit of that setup, he says, is that the ISP retains ownership of the customer from AT&T's perspective. "That keeps us honest," he says. "If our network doesn't continue to be competitive, the ISP can go and build their own, or can move to someone else."

For Sonic.net's partners, Jasper says, it's truly a unique opportunity. "A national carrier who's interested in further expansion in California might work with us; a local provider who's got a niche market might work with us—it's a wonderful solution," he says. "The availability of consumer DSL for end users, residential as well as small to medium enterprise, and the ability to sell to those folks at the kind of price points that you need in order to grow today, is really exciting."

Corporate Contact Info:

	Executive:	Dane Jasper, President and CEO
	Headquarters:	2260 Apollo Way, Santa Rosa, CA 95407
	Voice:	707-522-1000
	Toll Free:	888-766-4233
	Support:	707-547-3400
	Fax:	707-547-2199
	E-mail:	sales@sonic.net or support@sonic.net or billing@sonic.net
	Online Support:	http://www.sonic.net/support/index.shtml
	Policies:	http://www.sonic.net/support/docs/policy.shtml
	Network Statistics:	http://www.sonic.net/stats/

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