EarthLink Agrees To Buy Netpliance Subscribers

EarthLink, the country’s second largest ISP, has agreed to purchase Austin, Texas-based Netpliance Inc.’s i-opener subscriber base.

According to Dan Greenfield, EarthLink’s vice president of corporate communications, the transition is expected to begin in earnest around mid-March, but EarthLink will be in receipt of the i-opener data base sometime next week. Greenfield expects the transition to be completed by the beginning of April.

Greenfield also said that while EarthLink will supply the internet access, Netpliance will maintain control of the content, at least for the forseeable future.

Financial terms of the deal were not disclosed.

“The transfer of Netpliance’s i-opener subscriber base to EarthLink is in the best interest of our subscribers and will allow both companies to focus on our respective areas of expertise. For Netpliance, that is broadband infrastructure,” John McHale, chairman and CEO of Netpliance, said in a statement. “We are confident that our i-opener subscribers will be very pleased with EarthLink, which is an award-winning company recognized for its superior service and competitive pricing.”

i-opener subscribers will be assigned an EarthLink account and e-mail address shortly after the transition takes place, per the agreement between the two companies. The number of i-opener subscribers that will be affected by the sale is rumored to be in the neighborhood of 53,000, but EarthLink spokespeople could not confirm that number, and Netpliance’s CFO Kit Webster was not available Wednesday to give an exact number of customers involved in the transaction.

Netpliance shrunk its staff by 54 percent earlier this month, and many of the company’s top executives left. The company’s co-founder, Kent Savage plans to leave Netpliance March 15 to pursue other interests. Netpliance has said it intends to pursue focus on its broadband division for future expansion.

EarthLink launched an ad campaign earlier this month, touting its policy of keeping customer information to itself and not selling subscriber data to outside sources. Will this policy also affect Netpliance customers who will be transferred over to EarthLink?

“Our policy in these matters is, if we’ve acquired Netpliance’s customers, then they are treated like the rest of our subscribers,” Les Seagraves, EarthLink’s chief privacy officer, said. “Our marketing campaign on the privacy issue is to let the public know that when they sign up with us, we agree not to share their personal information with any outside source, unlike some of our competitors. It happens every once in a while that a few customers don’t want to become a part of a larger ISP — that they prefer doing business with smaller companies, and so they’ll decline to remain signed on with us. But we don’t continue to market to anybody who isn’t our customers just because we happen to have their information, and we certainly don’t share customer information if a subscriber decides not to join after an acquisition.”

David Sobel, general counsel for the Electronic Privacy Information Center in Washington, D.C., a watchdog group for internet privacy issues, said that it’s fairly standard practice for ISPs to market to individuals who subscribe to their services, but in terms of whether or not this occurrence is a violation of customer privacy, the line becomes blurred.

“The question of third-party vs. inside use starts to get clouded a little in these situations,” Sobel said. “The real bottom line is for most subscribers is whether they’re going to feel like they’re constantly having products or services pitched to them, and if the constant pitching is becomming something that annoys them, regardless of the source.”

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