SANTA ROSA — Sonic.net has entered into a public-private partnership to build new, ultra-high-speed Internet infrastructure in parts of the East Bay city of Brentwood, the latest development in the company’s longer-term plans to build those fiber optic network connections throughout the San Francisco Bay Area.
That infrastructure, allowing Internet speeds hundreds of times faster than typical household connections, could initially reach over 8,000 homes as well as all commercial areas constructed in Brentwood over the past 15 years, according to a report by city staff. The Brentwood City Council approved the agreement on May 13.
The approval comes on the heels of Santa Rosa-based Sonic’s two high-speed fiber networks currently operating in Sonoma County, along with a third set to come online within the next year.
“We anticipate expanding further,” said Dane Jasper, CEO.
The Brentwood project will take advantage of 120 to 150 miles of existing underground conduit constructed as part of mandatory building codes since 1999. Sonic will carry the cost of constructing that network for the city and, as part of the agreement, be granted a long-term lease to offer service to residents and businesses.
The gigabit speed possible on those networks — equivalent to 1,000 megabytes per second — is still a relative rarity in the United States. Less than 9 percent of U.S. residents have access to such service, according to the most recent February broadband access report from the Federal Communications Commission.
Yet that percentage is steadily increasing. In Sonoma County, Sonic currently offers gigabit internet service to businesses at the Northpoint Corporate Center and is working to expand the fiber optic infrastructure currently allowing service to around 700 homes in Sebastopol. A project to bring gigabit service to businesses at the Airport Business Center is expected to come online in nine to 12 months, Mr. Jasper said.
“They’re building over half a mile of conduit infrastructure each week out there right now,” he said.
Other Internet service providers have announced plans to build gigabit service networks throughout the country. Yet Sonic was among the first, partnering with Google for a fiber-to-the-home pilot project at Stanford University announced in December 2010.
Sonic has more than 80,000 customers and $45 million-plus in annual revenue, according to the Brentwood city staff report. Privately held Sonic stopped releasing that data publicly in 2009, when revenue totaled $21 million.
While declining to discuss specific financial and customer figures, Mr. Jasper cited Sonic’s reputation for data privacy and customer service as among the factors allowing it to compete with larger national firms. The company’s Ethernet-based broadband and voice services are also frequently less expensive than equivalent plans from competitors, with the new gigabit service shaping up to offer similar advantages.
In Brentwood, residential gigabit Internet and voice service is planned to cost $39.99 per month, the same as business rates on a “per-seat” basis. By comparison, a promotional rate for AT&T’s “GigaPower” Internet and voice service in its first available market of Austin, Texas costs $100 per month as part of a three-year contract.
Sonic has plans for around 20 additional hires in Santa Rosa in the next few months, spanning roles from customer service to construction, Mr. Jasper said. The company currently has 191 employees, and expanded to begin offering service in the greater Los Angeles area in early 2014. It also serves San Francisco, the North Bay and Sacramento regions.
Competing with Comcast, AT&T
While a number of smaller internet service providers operate throughout the United States, the majority of those companies cater specifically to business. Mr. Jasper cited Sonic’s residential customer base as unique among those firms, equivalent to around two-thirds of accounts.
That combined focus puts Sonic in direct competition with large national firms like Comcast and AT&T, companies that are both seeking mergers that would broaden their customer base and ability to package services like Internet, phone and television.
Sonic itself offers a bundled television service through DirecTV. And although AT&T has announced plans to purchase DirecTV, Mr. Jasper said he “wouldn’t anticipate a change” if that merger is approved. Even if that potential merger somehow affected Sonic’s television bundle, alternatives exist, he said.
“The difference in scale between these firms and us is so massive — the fact that these entities are merging doesn’t make much of a difference for us,” he said.
Construction for Sonic’s Brentwood fiber network is expect to begin in two months, with availability to all potential customers within 15 months. Pilot projects are also under development to bring access to potential customers beyond the reach of those existing underground conduits.
“There’s an overarching theme that there are not enough competitive choices for broadband access, telephone service and television,” Mr. Jasper said. “Sonic is a rare example of an alternative.”
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