OnFiber: Bottoms Up!
OnFiber Communications Inc., a startup provider of last-mile fiber services, is finally coming out of stealth mode this week after more than 18 months of strange goings-on.
The strangeness includes no fewer than three changes of CEO, the latest incumbent being Danny Bottoms, who took over a week ago. It also includes two of OnFiber’s founders -- Jagdeep Singh and Drew Perkins -- going off and setting up an equipment startup, Zepton Networks Inc. (see Zepton: Take Me to Your Leaders).
Jagdeep and Perkins originally founded Lightera, the startup that was acquired by Ciena Corp. (Nasdaq: CIEN) and developed what is now Ciena's CoreDirector switch.
The machinations have the paw marks of Vinod Khosla of Kleiner Perkins Caufield & Byers (KPCB) all over them. Khosla played a key role in financing OnFiber and Zepton. And that’s encouraged conspiracy theories.
Khosla's involvement has also encouraged comparisons between OnFiber and two other Khosla ventures into the service provider market -- BroadBand Office (BBO) and Zephion Networks -- both of which met untimely ends earlier this year (see BBO Files for Bankruptcy Protection and Zephion: Anatomy of a Debacle).
OnFiber’s decision to tell the world what it’s up to might be an effort to demonstrate that it isn’t another BBO or Zephion.
Bottoms says that OnFiber is offering a replacement for the access networks offered by ILECs (incumbent local exchange carriers). It plans to do this in 26 major metropolitan areas and is already operational in Dallas, Houston, Philadelphia, Seattle, and the San Francisco Bay Area.
Bottoms likens OnFiber's network hubs to the phone company's central offices. Just as copper phone lines emanate from a phone company's central office, singlemode fiber will run from OnFiber's hubs to its customers. "Everyone that's served out of our hubs can get dedicated glass," Bottoms says. OnFiber's network architecture will allow it to turn up services more quickly and at a lower cost than can be done on existing Sonet rings. "If a customer has a DS3 [45 Mbit/s] connection and he wants to upgrade, then we just change the interface at the customer premises and I'm not burdened with having to upgrade an OC3 [155 Mbit/s] ring to OC12 [622 Mbit/s], or anything like that."
The company plans to sell Sonet, Ethernet, and wavelength services to other carriers, Internet service providers (ISPs), and businesses. It will help service providers connect their points of presence within a local market and provide access connections between service providers and their business customers. The company will also offer medium and large businesses connectivity among their corporate campuses within a metro area network.
OnFiber's customers already include Microsoft Corp. (Nasdaq: MSFT), Yahoo!, Qwest Communications International Corp. (NYSE: Q), and Phoenix Internet.
OnFiber's network includes gear from Extreme Networks Inc. (Nasdaq: EXTR), ONI Systems Inc. (Nasdaq: ONIS), and Cisco Systems Inc. (Nasdaq: CSCO). It says it has spent about $11 million on equipment so far and has some "very modest" vendor financing help from Cisco and through ONI via a third-party lender.
The company's had two rounds of funding totalling $136 million. Its most recent round closed in August 2000. Bottoms says the company will seek further financing during the first or second quarter of 2002.
OnFiber was founded in December 1999 by Singh and Perkins along with two other industry veterans -- Steve O’Hara, previously with Nortel Networks Corp. (NYSE/Toronto: NT) and Micron Technology Inc.; and Michael Guess, previously with Broadwing Communications Inc. (NYSE: BRW).
Guess still serves as OnFiber's engineering and operations boss. O'Hara is its executive vice president of strategic alliances. Clark Osterhout is the company's sales boss, and Bill Metcalfe runs business development.
CEO Bottoms was the former president of MasTec Inc.'s network construction unit and the former vice president of construction for Qwest. As noted, the company has had three other CEOs. First there was Singh, who gave up the CEO role but continues to serve as OnFiber's chairman. Then there was Bernard Bianchino, who recently took a board seat at AirGate PCS Inc. "We had gone out for a Series C round earlier and... when that didn't occur, Bernie looked at everything and said, 'I want to be associated with a bigger company,' " Bottoms explains.
In between Bianchino and Bottoms was Douglas Pritt, a former executive with Sprint PCS. Pritt just resigned from his post this month. Neither Bianchino nor Pritt could be reached for comment.
OnFiber's backers include KPCB, Incepta, Bear Stearns & Co. Inc., Amerindo Investment Advisors Inc., Level 3 Communications Inc. (Nasdaq: LVLT), GE Capital, TeleSoft Partners, and others. The company employs 125 people.
- Phil Harvey, Senior Editor, Light Reading