There’s a new player in the local Internet service provider wars. Its name is Webpass, and before you renew your cable or DSL contract with Comcast or Verizon, you might want to check it out.
Webpass offers very high-speed Internet connections of 100, 200, or 500 megabits per second (Mbps) for residential customers, and the service costs $55 a month, or $500 a year. There’s no contract, no modem, no bundling with other services, and customers can cancel at any time, the company says. Meanwhile, businesses can sign up for Internet service ranging from 10 to 1,000 Mbps.
The catch is that the local service is not quite available yet. Webpass has just landed in Boston, which is the company’s fifth major metro area (more on that below). A half-dozen employees are starting to install equipment this week, and the service should be up and running in downtown Boston in about three or four weeks—with plans to expand from there.
Webpass is at the forefront of wireless Internet service providers (WISPs) that help people “cut the cord” from cable and phone giants, if they just want Internet and over-the-top services from the likes of Netflix, Hulu, Apple TV, and Amazon. The company sells Ethernet service to its customers, but behind the scenes the technology uses radio-frequency wireless links, which depend on line-of-sight communication between antennas installed on buildings (dishes are about a foot wide) and nearby microwave towers.
“We’ll start with point-to-point wireless and, pending regulatory approval, we’ll start laying fiber,” says Webpass founder and president Charles Barr.
He calls his company’s wireless infrastructure “a very organic network—we start with a base, and then it goes building to building to building, based on demand.” Webpass typically signs up residential customers for the first six months in a new city, to build up its network before signing commercial deals, Barr says. It sounds like Webpass won’t turn away commercial business, but it needs to make sure its network can serve a given business location immediately.
The 85-person company got started in San Francisco back in 2003. It rolled out its super-fast service in the Bay Area first, before expanding to San Diego, Miami, and, most recently, Chicago. Barr says the company went through a lot of trial and error in the mid 2000s and carefully chose its expansion sites to test different parts of its model. San Diego: a remote city. Miami: cultural differences. Chicago: a big market. (Xconomy’s Wade Roush previously wrote about his experience with Webpass in San Francisco.)
“It’s very exciting that Webpass is coming to Boston,” says wireless consultant Mark Lowenstein, who is not involved with the company. “We need more broadband competition here. The city and some of the closest suburbs such as Brookline and Cambridge do not offer a lot of choice.”
One of the chief complaints around town (and elsewhere) is that Comcast and Verizon make it very difficult, if not impossible, to get broadband service without bundling it with cable or phone service, thus driving up the monthly price. Slow speeds and poor customer service from the monopolists are also frequently cited. Let’s just say the masses are not crying over the failed Comcast-Time Warner Cable merger.
It’s surprising, then, that there aren’t more local competitors to the cable and telecom providers. But as Barr puts it, “there’s no real roadmap for how to do it.” In addition to creating and managing new wireless infrastructure, a company has to navigate the regulatory environment. That includes getting the necessary permits and licenses through the state and local government. “It’s not onerous,” Barr says, but each company has to figure out how to break into each market. What’s more, he says, the legal framework for Internet service providers is not clearly defined.
One competitor in Boston is NetBlazr, a wireless startup that recently raised $675,000 from angel investors including Carbonite co-founder David Friend. Its service is currently available in much of Boston and parts of Cambridge, MA. (NetBlazr, which went through the MassChallenge startup program, has also raised a little under $1 million in Small Business Innovation Research grants from the National Science Foundation.)
Barr doesn’t seem fazed by the competitive landscape. “The market divides,” he says. “Some care about prices, and they go to [services like] NetBlazr. Others care about quality, and they go to Webpass.” The big question is whether upstarts like Webpass, NetBlazr, and Monkeybrains (another San Francisco company) can get enough of a foothold, or whether they will always be niche players in a huge market.
Lowenstein, who is managing director of Boston-based advisory firm Mobile Ecosystem, says “it will be interesting to see where, and how quickly, Webpass will roll out. There have been some other, not particularly successful attempts at launching competitive broadband services.”
Webpass will have its hands full in the early days, as it looks to build up a base of fanatical customers who will evangelize for its Boston service. The company needs to get in front of decision makers—property managers, building developers, and the like—who will allow Webpass access into buildings to install its network. But Webpass has done it before in other cities.
Its initial Boston team has expertise in sales, networking, and construction, Barr says. He stresses that the mindset is very different from a telecom or cable company. “We’re not arrogant with our customers. That’s why people hate Comcast,” he says. For new hires, he adds, “The biggest thing for us is attitude—people realizing we are selling a service that’s vital, but you can’t be dictatorial with customers.”
In the meantime, Webpass is profitable and seems to be growing a healthy business. The company says it has about 20,000 residential customers nationwide, which make up about half its business; the other half is commercial customers. Contrary to most Bay Area tech companies, it has never taken venture funding. As Barr puts it, “We didn’t raise money. We do make money. We’re an oddball.”
But that means the steady effort must continue for Webpass to succeed and keep growing. “We won’t be in every city overnight,” Barr says. “We’re a normal company that grows normally. You have to sign contracts, install network equipment, run fiber, buy trucks, hire construction, and it all takes money.”
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