Provider Profile: NextLevel Internet

San Diego-based internet service provider NextLevel Internet delivers connectivity to “several thousand” small to mid-size businesses, according to company executives. Now the firm is throwing its hat into the VoIP ring.

Founded in 1999, the 12-person company went live last June with a VoIP offering that already had been in beta phase among hundreds of users. This month, NextLevel announced general availability of the telephony product, positioning its VoIP offering as a cost-effective way for businesses to get off their old PBX systems as they adjust to the new economy.

As firms downsize, they find themselves trapped in inappropriate and often outmoded telephony, said NextLevel General Manager Jerry Morris. “We are finding that for folks to move their existing traditional PBX from building A to building B, the cost is greater than to buy our system from beginning to end,” he said. “They typically are accustomed to a very nice phone system, and they just can’t figure out how to make the behemoth move with them.”

NextLevel offers a hosted solution that it says can eliminate the need for costly wiring, along with other expenses related to a major phone-system replacement or relocation. The company also claims to bring down maintenance costs and other expenses related to traditional phone systems.

Users pay a $95 setup fee, $30 per month per seat and a per-minute charge, Morris said.

The system is built upon NextLevel’s proprietary, voice-prioritized Clear Channel Voice system, which enables the network to carry voice traffic in the same capacity as it does data traffic. Morris said the technology can assure stable communications for organizations as large as 200 users or more. (NextLevel’s typical data customer has 35 to 40 seats.)

Six programmers spent three years developing the technology that would be the basis of the VoIP offering. Getting to beta “was incredibly strenuous,” Morris said. “If a web site doesn’t come up quite as fast as we would like, that is usually acceptable, but if we start hearing strange packet loss in our phone conversations, the end user experience is seriously disrupted.”

Getting it right took “a lot of coding and programming, all day long.”

In the quest for quality, an ISP such as NextLevel may have an advantage, in so far as it can piggyback upon its own existing data infrastructure. NextLevel has collocation facilities in San Diego, Tustin, Calif., and Atlanta, and has experience in running dedicated lines to its clients.

That backbone already has helped the company establish itself at the upper end of the SMB market. “It allows us to get into much larger deployments” including a 180-person law firm in downtown San Diego, Morris said. “Because we control the infrastructure, we are able to get into a lot of larger environments that other hosted providers could not touch.”

While hardware has helped position NextLevel for its move into VoIP, Morris describes the market entry as being primarily about software. “We don’t view this is as a voice offering or a data offering. We view it as a Software-as-a-Service offering,” he said.

The distinction plays out primarily on the marketing end. The SaaS emphasis is all about ease of use. It’s a promise of convenience. To keep up that promise, NextLevel has done some heavy lifting on the back end.

Through beta and then through a year of live usage, engineers have tinkered with billing, tracking mechanisms, ease-of-use upgrades. “More than anything, we have figured out that the process of continual improvement is never going to stop,” Morris said.

“The front-facing offering is doing very well, our customers like it, they enjoy it. From an operational standpoint, now we are trying to figure out how to be as efficient as possible,” he said. In some cases, for example, NextLevel’s own decentralized billing and operations platforms have required undue amounts of care and feeding. As the company scales up its customers, it also is working to scale up its own business practices.

Sometimes this means scaling down. When it comes to telephones, for example, the company has gone from supporting a dozen manufacturers to just three: Polycom, Linksys, and Grandstream.

The lesson of the phones has been learned across the boards. A successful first year in VoIP has taught NextLevel executives to be modest, or at least highly specific, in their ambitions.

“Initially we had this very broad phone platform that could do virtually anything,” Morris said. To grow the business, “we had to create more of a reproducible offering, which meant reducing some of that broad scope, instead of offering everything to everybody and constantly building from the ground up.”

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