For even the most well-established equipment providers, economic realities are creating hardships because service providers are less interested in building out new networks, which diminishes the need for equipment. For a new equipment player, the circumstances appear even more discouraging.

But Negen Access officials believe otherwise. In fact, they believe these tough times for the telecom industry will allow their start-up to thrive because the company's broadband gateway is designed to be a multipurpose answer to service providers' problems by generating new revenue streams from existing wiring.

Negen's gateway combines the functionality of a PBX system with high-speed LAN and WAN capabilities across any type of network, whether the lines are copper, fiber or cable, said Evan Bontemps, Negen's president, founder and CEO. To be demonstrated nationally for the first time at Comnet this week in Washington, the device is designed to provide symmetrical access rates of 2 to 10 Mb/s across copper, with speeds exceeding 100 Mb/s guaranteed over fiber.

Enabling this flexibility is Negen's laptop-sized devices, which can be located at an end user's site, in a central office or at a co-location facility. Service providers using Negen's solution will be able to differentiate themselves from the competition by being able to offer multiple new services with relative ease—the key to success in the current market, Bontemps says.

And being able to provide services to end users flexibly and easily is crucial in service providers' eternal struggle to prevent customer churn, adds Jim Hamlin, Negen's vice president of sales. “For 10% to 15% savings, [business customers] will gladly go from one service provider to another,” Hamlin said.

Negen's technology-neutral solution is designed to let carriers offer premium services without having to make major infrastructure changes, Bontemps said.

“With the Negen solution, you can do videoconferencing…and you don't have to rewire anything,” he said.

Plus, Negen's gateways can be networked via its broadband access switch, which can support as many as 24 gateways at a cost of about $600 per gateway. This arrangement means calls routed from one gateway to another served by the same switch—for example, between company sites—never use the public network, so they escape access charges, Hamlin said.

Such flexibility is particularly important to small businesses and multi-tenant facilities lacking the capital available to revamp their telecommunications systems. By partnering through a carrier via Negen, landlords can offer advanced services and enhanced PBX functions for less than $1000, Hamlin said.

It is a combination already yielding return for at least one building owner.

“For me, one of the advantages was being able to move people and connect them to the Internet immediately,” said Terry Argue, president of Argue Properties in Tulsa, Okla. “Before, I had to go through Southwestern Bell, and it would take at least 45 days. It saves money for the tenant and adds flexibility to what we want to do.…I think it will be well-received by the market.”

While technology-neutral PBX systems exist, Negen's ability to deliver on its high-speed access promises could earn it a notable market niche, said Joe Gagan, a senior analyst for The Yankee Group.

“They have a fairly unique product in that they offer the high-speed access and the phone system all in one,” Gagan said. “Carriers are going to want it because they want to sell value-added services that allow them to make more money.”

This mantra is sure to be repeated often by Negen officials during the next few months, when the company plans to seek carrier customers and $15 million in funding. The ability to do this effectively is critical to the company's future, Gagan said.“They have to get the money, sell the product and distribute it,” he said. “They've got the right idea and the right management; now it's time to execute.”

Competition Watch

Birch Telecom finalized an interconnection agreement with BellSouth and received certification from nine states to offer local and long-distance services to small and medium-sized businesses in the southeastern U.S.

New Edge Networks completed installation of network equipment in Augusta, Ga., enabling 75% of homes and businesses to sign up for broadband services such as DSL, WANs, frame relay and virtual private lines.