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DSL.Net on the Mend

DSL.Net officials Wednesday said they would take customers off of the hands of rival Aplus.net.

The deal marks a unique turnaround in the independent digital subscriber line (DSL) provider industry, one that only a relative few have been able to pull off in the space.

A little more than a year ago, DSL.net was just another NASDAQ company announcing job cuts and a restructuring to "return to profitability." The company joined the likes of industry giants Nortel Networks , Global Crossing, SBC Communications , and AOL Time Warner , who were all looking for a solution to the "cash flow positive" quandary.

In addition, it wasn't a promising time for an independent DSL provider to be in the business. No one wanted to invest in telecom in late 2001 and being able to provide a competitive high-speed service against the Baby Bells seemed unlikely.

DSL.net, however, was able to secure $15 financing at a time when one of its well-known peers -- Covad Communications -- was entering Chapter 11 bankruptcy protection. Two months ago, the Connecticut-based CLEC closed its latest round of financing, bringing its total since June 2001 to $35 million.

Robert DeSantis, DSL.net chief financial officer, said at the time of the latest round of investment the company would be in position to become cash-flow positive. It also gave them more room to pursue their goals as a self-styled "industry consolidator."

"We continue to believe that there are considerable growth opportunities for well funded companies such as DSL.net within today's broadband arena," he said.

Today's consolidation of Aplus.net's DSL customers means more monthly revenues to bolster the bottom line, though officials on both sides wouldn't release the number of customers affected or the value of the arrangement. They also didn't announce a timeline for the switch to take place.

Keith Markley, DSL.Net president and chief operating officer, said the delay would not adversely affect the provider's newest customers.

"As an industry consolidator, we believe we've assembled the right combination of capabilities across a broad national footprint to assist customers whose service providers are exiting the business, and to migrate these customers to our network with minimal or no downtime," Markey said.

Aplus.net provides Internet access to approximately 78,000 customers -- business and residential -- via dial-up, satellite and leased line (T-1, DS3) connectivity. The company is a division of Abacus America, Inc., which develops popular operational support system (OSS) application Rodopi.