Right in your own backyard: CLEC OnSite delivers packaged services directly to buildings – competitive local exchange carrier OnSite Access

Right in your own backyard: CLEC OnSite delivers packaged services directly to buildings – competitive local exchange carrier OnSite Access – Company Business and Marketing

David Schober

BY David Schober OnSite Access, a competitive local exchange carrier, has found a niche market in an area most companies have ignored-the multitenant commercial building. Instead of going after businesses individually, OnSite targets the entire buildings that small to medium-sized companies occupy and sells service by becoming the default carrier for the building. Like many CLECs, the company offers high-speed Internet and data services along with a suite of value-added telecommunications products. But to bring these services to clients, OnSite goes through the building owners by rewiring buildings for free. The owner signs a 10- to 30-year contract for this service under which OnSite becomes the virtual communications manager of the building. The New York-based company serves the surrounding tri-state area where aged buildings and aged wires make up the downtown areas. And rather than focus on the last mile of the network, OnSite focuses on what Scott Jarus, president and chief operating officer, calls the last foot. The basic architecture of the in-building network consists of fiber brought to the basement, and from there OnSite runs standards-based digital subscriber line to the individual floors. The tenants receive DSL advantages without having to worry about distance because the lines are all internal. Jarus said the small businesses in multitenant buildings are “chronically underserved-they welcome us with open arms,” explaining the way the 18-month-old company has managed to secure semi-exclusive contracts for 25 million square feet of office space. “Somebody had to attack this market. [OnSite] understands the real estate business. If you can’t get into the building, you can’t get to the tenants” said Jarus. Clients in this market need high-speed data and Internet connections, but costs associated with getting these services individually are prohibitive for the smaller companies. OnSite has set itself up as a small CLEC, “achieving power building-by-building,” said Rob Norcoss, a vice president with Mercer Management Consulting. By working its way into markets that the larger CLECs and incumbents ignore, OnSite can move in and be fairly competitive before others get there. “What we end up with is a big fish, little fish scenario,” said Norcoss. “In essence, they become a small monopoly.” OnSite brings the building owners into the game by offering them a cut of the profits. This makes them partners with the company, and they end up having a vested interest in how well the company does within their building. Owners become marketers for OnSite. Norcoss explained that from the building owners’ standpoint, this is a pretty good deal. They not only get new wiring and another way to sell space, but they also get a piece of the profits that OnSite takes in on their buildings. SL Green Realty Corp. recently signed an agreement with OnSite to wire 16 properties consisting of 5.5 million square feet. Most of the properties are Class B buildings, which are more than 17 years old but are structurally sound. The OnSite deal allowed SL Green to offer high-speed digital access and advanced telecommunications as an amenity of its older buildings. “In Class B buildings, we need to stay on top of technology, and they are the most flexible on timing and getting the buildings done that we need to get done,” said Gerald Nocera, executive vice president of SL Green. With everyone wanting faster data services and because they will already be offered to the clients, the vast majority of tenants will use the on-line service, Nocera said. Copyright 1998 by PRIMEDIA Intertec, A PRIMEDIA Company. All rights reserved.

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