ISP Channel Emerges as Turnkey Data Source

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Denver -- ISP Channel last week nailed agreements with
modem manufacturers Com21 Inc. and 3Com Corp., and it added that contracts with more than
one-dozen small and midsized operators are also in place.

ISP Channel is one of a recent batch of start-ups focused
on turnkey solutions for operators to get into the high-speed-data game with zero upfront
costs.

Based in Mountain View, Calif., ISP Channel is a subsidiary
of MediaCity, which is owned by SoftNet Systems. The start-up, which hadn't talked
publicly about its plans until last week, emerged at the Western Show in December, and it
has been quietly putting together carriage agreements since then.

The service formed after MediaCity was tapped to assist the
Palo Alto (Calif.) Cable Co-Op with its high-speed-data launch. MediaCity was one of the
early Internet-service providers in Silicon Valley "before Netscape [Communications
Corp.]," focused on helping businesses with networking applications, ISP Channel
president Ian Aaron said last week in a briefing here.

Aaron that the company's mission is to provide small
and midsized operators with a value-added, no-cost service method to get into high-speed
Internet-access and telecommunications services.

Aaron described ISP Channel as "the @Home [Network]
for independent cable operators."

"I think that cable operators are going to have to be
aggressive in the data-service market," he added, noting a slimming competitive
window fueled by telco ADSL (asymmetrical digital subscriber line) and wireless
high-speed-data efforts.

ISP Channel is not alone in the turnkey-data market
segment. Also competing for the business of small and midsized operators in that space are
Denver-based Online System Services and HSANet, as well as Los Angeles-based Internet
Ventures Inc.

One of the earliest viers for turnkey high-speed-data
services, Community Networks Inc., folded last year when its parent, BTG Inc., found the
market not profitable enough to continue.

But Aaron is confident that ISP Channel, which he
deliberately configured to operate like a cable channel, has the right blend of talent,
financing and strategy to succeed.

"Our strategy is very different -- it's more of a
marketing and distribution strategy than a connectivity strategy," he said.

For starters, Aaron tapped cable pioneer Sel Kremer, who,
at 74 years old, strolled around last week's Texas Show in San Antonio in a denim ISP
Channel shirt and suede hat to alert operators about the benefits of ISP Channel's
approach.

"If they can keep doubling themselves, I think that it
can be a very big business," Kremer said, explaining that he decided to sell the
service because of Aaron.

"I never work for anybody who's not a
genius," he said.

Sitting on ISP Channel's board of directors are Ed
Bennett, formerly president of Prodigy Services Co. and VH1; and Larry Brilliant, founder
of The Well, a San Francisco-based online bulletin board.

Aaron's target, he said, are the 3,542 systems serving
between 1,000 and 20,000 subscribers, or about 28 percent of total basic subscribers in
the United States.

ISP Channel's plan is to provide Internet and
telecommunications services for operators, while offering equity financing for those that
need to upgrade plant to two-way capacity before they can take the data plunge.

Plus, Aaron said, ISP Channel's links to MediaCity --
one of the first ISPs in Silicon Valley -- give it immediate access to Web applications
and content.

Already, ISP Channel has snared 12 contracts, including the
Palo Alto Cable Co-Op, San Bruno (Calif.) Cable TV, Ponderosa Cable, Cablevision of Lake
Travis (Texas) and Orion of San Diego, as well as small MSOs News Press Gazette and Sun
Country Cable.

Jeff Adler, regional manager of News Press Gazette, said
ISP Channel's no-cost approach "allows us to focus on our core
video-entertainment business, while moving forward with the introduction of broadband
Internet access."

ISP Channel said it provides clients with integration,
Internet-backbone connectivity, cobranded browser software and cobranded national and
local content.

Subscribers pay $49 per month to get broadband access at
speeds of up to 27 megabits per second, Aaron said.

Aaron added that beyond cable modems, ISP Channel is also
tracking Web set-top developments, with plans to address that market segment when it
emerges.

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