FNet Corp. brings a vertically integrated hardware and services plan to the table in its bid for IP telephony success.

The company is a subsidiary of equipment vendor Franklin Telecom. Franklin founded FNet three years ago as an Internet service provider test bed for its equipment. FNet has grown into a successful venture in its own right and announced in late April that it will offer Internet telephone service through 12 domestic and international points of presence by July. It also plans to have 50 cities worldwide on its network by the end of the year.

The move to offer Internet telephony results from the changing tide in the industry over the last year, says Frank Peters, founder, chairman, president and CEO of Franklin Telecom and chairman of Fnet.

"There are certain things that a company has no control over, including public excitement. A year ago, people thought IP telephony was a joke," he says.

Peters believes that FNet's affiliation with Franklin, as well also Franklin's experience in data traffic equipment (dating back to 1981) give the company an edge in offering IP telephony services. Franklin introduced a new billing system in late May that will complement its voice over IP solution that FNet is using to provide the service. FNet can buy anything its wants in terms of network equipment, Peters says. "But it can ask for special features [from Franklin] that other vendors might not want to do."

FNet's service will benefit from the fact that when Franklin began working on an IP telephony platform, it did so from a phone-to-phone perspective rather than a computer-to-computer one. That approach should help ease the transition as IP networks become more prevalent and require more interconnection.

"Our stuff is standards-based," Peters says. "Theoretically, we ought to be able to talk to [other vendors' boxes]. Some day that will happen."

With FNet in the picture, Franklin will be careful about which companies it sells its voice-over-IP platform to. While WorldCom is a customer, Franklin might be hesitant to sell to other huge carriers.

"In a way, we're eating our own babies," Peters says. "But if you look at the people buying our hardware, they're mostly regional people who will want to hook onto FNet's network for out-of-region call delivery."