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CAIS Internet Reinvents Itself

Seeking to rebrand itself as a tier-one ISP, Washington, D.C.-based CAIS Internet Inc. Tuesday said it will ask for shareholder approval to change its name to Ardent Communications and announced that its nationwide network has been fully Multi-Protocol Label Switching (MPLS) enabled. The firm also picked up 1,947 former PSINet business DSL subscribers. It has completed the conversion and provisioning of those subscribers.

MPLS is an emerging protocol that enables the creation of virtual tunnels through an IP network. This in turn allows for faster routing of traffic through the network and the ability to route traffic around network congestion. It aslo enables the establishment of classes of service, where data traffic from a particular user or IP address is given priority through the network over other data streams (determined by advanced service level agreements). CAIS can also go further by marking each packet by its application and then giving priorities to particular applications.

CAIS' network currently serves 38 major markets with a fully redundant OC-12 and OC-3 coast-to-coast network. It has dual Cisco 12000s and dual Cisco 7200s in each of its 29 POPs -- 13 POPs have many more 7200s.

"MPLS enables us to offer our business customers a network designed for mission-critical applications, rather than a 'best effort' experience," said Michael Lee, president and chief executive officer of CAIS. "MPLS is currently being used in the CAIS network for tag switching, an efficient, high-speed way of routing traffic throughout our IP network. However, in the next 60 days, the MPLS functionality of our network will be fully exploited to create virtual tunnels, perform advanced traffic shaping and enable the future offerings of application-specific and class-specific routing to our data customers nationwide."

CAIS made its name on the ISP scene by offering hospitality service -- that is broadband connections for hotel rooms and conference centers -- and by providing in-apartment high-speed Internet access utilizing OverVoice to multi-dwelling units (MDUs). But the company had trouble finding "the zone" in those markets. Many of the hotel services were not profitable and the MDU market was worse. It appeared the company was heading for bankruptcy.

Determined to turn the company around, CAIS brought in Lee, a veteran of the telecommunications industry. Lee brought in his own management cadre and a determination to utilize the nationwide network the company had built for its hospitality business to reinvent the company as a tier-one ISP.

Lee cut the MDU business and dramatically scaled back the hospitality business.

"We're out of the MDU business," Lee said. "In terms of the hospitality business, we're focusing on those properties that we've found were profitable."

The company's hospitality direction is now focused on more than just in-room solutions. It will concentrate on meeting rooms, it's automated business center product and broadband kiosks.

But the jewel, according to Lee, is the network itself. According to Lee, the company has always been a successful ISP, though that point has remained hidden. In fact, about 90 percent of CAIS' revenues have come from the ISP side of its business.

However, until now, its network only been 7 to 10 percent utilized. The goal is to change that by offering a full range of bundled hosting and data services. The company is rolling out managed VPN services. But Lee said CAIS' managed VPN will go a step beyond most offerings on the market. CAIS' billing package is a CLEC billing package -- the legacy of its extensive hospitality services which required that the company know exactly how much time a customer utilized.

"Because we have this billing package that is rate-based, we can offer people managed VPN services where they pay when they use it," Lee said.

CAIS is going, almost exclusively, after business customers -- especially business customers with multiple locations around the country.

"We're going to be able to offer very inexpensive on-Net calling for customers with multiple offices," Lee said.

Currently, in addition to its T-1, DS-3, xDSL, Two-way VSAT and business dial-up services, the company offers Web hosting, collocation, dedicated servers, caching, security/firewall, e-mail and DNS services. Possible future technologies include voice, video, and ASP services.



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