How NetBlazr, Webpass Court Cord-Cutters and Nibble Comcast’s Lunch

Xconomy Boston — 

Sometimes what it takes to compete with a heavyweight is a series of small, methodical steps.

At least, that’s the strategy that upstart wireless Internet service providers like NetBlazr and Webpass have chosen as they try to nibble off market share from Comcast and other huge incumbents in the cable, phone, and satellite industry.

When we last checked in with Webpass, the 12-year-old San Francisco-based company was just beginning to roll out its service in Boston—its fifth market. Five months later, Webpass is available in a dozen neighborhoods around downtown Boston, as well as Cambridge, spokeswoman Jennifer Bennett says in an e-mail message.

Meanwhile, NetBlazr—founded in the Boston area in 2010—is also doubling down on expansion efforts here and pushing a faster Internet package that is more competitive with services like Webpass. NetBlazr got a boost last week with a $300,000 investment from local angel investor and CCBN co-founder Jeffrey Parker. That followed $675,000 in outside funding earlier this year from a group of investors, including Carbonite chair David Friend.

The emergence of Webpass in Boston and new money for NetBlazr mean more competition locally for Comcast and Verizon.

But one of the challenges for NetBlazr and Webpass is that, despite reporting growing customer bases, they remain niche players.

“Comcast probably has 70 percent of the market” locally, NetBlazr co-founder and CEO Jim Hanley says in a phone interview. “When Webpass comes in or any other company comes into this market, the big 800-pound gorilla probably doesn’t notice us that much.”

The bigger question is, will more consumers notice these small wireless Internet service providers?

Webpass expects to have “a few hundred customers” in the Boston area by mid-October, Bennett says. It has about 20,000 customers across its five metro markets.

Hanley won’t disclose how many customers NetBlazr has, but says the number is growing 10 percent each month and has doubled in each of the past two years. The size of its coverage network has also been doubling each year, with about 100 buildings in the Boston area outfitted with antennas on their roofs used to deliver the Internet signal, he adds. (Webpass uses similar radio-frequency wireless technology that involves line-of-sight communication between a network of antennas installed on buildings and nearby microwave towers.)

Unlike many consumer tech companies, neither NetBlazr nor Webpass are spending heavily on advertising.

Webpass—which employs nearly 100 people, including six in Boston—hasn’t taken venture capital. It has tried to attract early adopters in Boston through public relations, networking, and events, Bennett says.

“When there are more options (which Boston lacks), Webpass always shines through as the preferred provider, but when there is little to no competition it’s harder for us to make an immediate impact in a new market,” Bennett says in the e-mail. It may sound counter-intuitive, but Bennett says “People are less inclined to switch and try something new when there aren’t a lot of options. However, once they do switch, they are impressed with the service, start to tell others, and it’s like a domino effect, everyone starts following.”

NetBlazr’s new capital is being spent on building out its wireless infrastructure and growing its current staff of 12, Hanley says—not marketing. The company has mostly relied on word of mouth to drive demand, he says. (It’s telling that both Hanley and Bennett cite their companies’ Yelp ratings with pride, illustrating how important it is to them to keep customers happy.)

“We have a long list of people who are eager to have us,” Hanley says. “It’s less knocking on doors and introducing [ourselves], and more taking phone calls of people who want our service.”

Webpass and NetBlazr are among the services helping consumers “cut the cord” from cable and phone giants, and just pay for Internet and so-called over-the-top content from Netflix, Hulu, Apple TV, Amazon Instant Video, and the like. Webpass and NetBlazr are pitching themselves as alternatives to the entrenched industry leaders, offering high-speed Internet that is more affordable than a bundled services package from the “big guys” and free of contracts, hidden fees, or gimmicks, the companies say.

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