Business News - Velocita Earns Larger Network Contract with AT&T

Posted: 05/2001

Velocita Earns Larger Network Contract with
AT&T
By Josh Long and Bruce Christian

Building along some of the most coveted rights of way in the nation, Velocita
Corp. (www.velocita.com) won a contract in
February to develop roughly 1,300 additional route miles of AT&T Corp.’s (www.att.com)
fiber optic network.

From excavating to installing the telecommunications hardware, Velocita will
develop 6,300 miles of the big carrier’s next-generation network, including the
5,000 route miles originally contracted for last year. Velocita president Bob
Collet said after the announcement that AT&T recognizes that building its
own network is not its core competency and that it could get a cost-efficient
solution by turning to Velocita, formerly PF.Net Communications.

Collet explained that the company changed its name last December because
PF.Net also stood for Pacific Fiber.

"We had to start from scratch," Collet said. "Velocita is easy
to say, easy to sell and has a bit of an international flavor to it."

Addressing the AT&T deal, Collet said, "What AT&T is
contributing to this endeavor is the access to rights of way." Collet, who
was company president before shifting to the CTO role, added that AT&T
maintains the fiber almost everywhere on the network.

The AT&T fiber is part of a planned 18,000-route-mile Velocita network.
Much of the fiber will go through second-, third- and fourth-tier cities, Collet
said. Nearly 7,000 of the miles are targeted for AT&T, and another 4,000 for
Touch America.

In a separate agreement, Velocita obtained the right to purchase
approximately 7,100 route miles of dark fiber.

"Our original intent was to construct a network of dark fiber,"
Collet explained. "The economy is truly based on offering broadband
services."

The plan of going all dark was scrapped, because company investors wanted
Velocita to push forward as a service provider.

AT&T and Velocita market dark fiber to wholesale customers, and Velocita
is one of three vendors to join AT&T in building the first stage of the
fiber optic network. Touch America Inc. (www.tamerica.com),
which gained 300,000 customers in 14 Western states after the blockbuster US
West/Qwest Communications International Inc. (www.qwest.com)
merger last summer, is another.

Touch America was the telecommunications arm of the Montana Power Co.,
however, Montana Power announced in February that it would sell off all its
utility arms and invest the proceeds into Touch America.

Touch America swapped route miles awarded in the AT&T contract with
Velocita. It expects to complete its 26,000-mile fiber optic network by the end
of the year, according to Janine Liscic, a Touch America spokeswoman.

Liscic said CapRock Communications was the other service provider that
received the initial AT&T contract. Cedar Rapids, Iowa-based McLeodUSA Inc.
(www.mcleodusa.com) purchased CapRock
last year.

Velocita owns three conduits on the fiber optic network and shares one with
AT&T; AT&T owns the other two conduits, a Velocita spokeswoman said.

As of late March, approximately 60 percent of the network Velocita is
developing for AT&T had been built, and company officials were finalizing an
agreement to install the fiber optic hardware.

Velocita "imminently" planned to activate the first segment of the
network between Houston and Jacksonville, Fl., she added.

The nationwide network, which will have an initial capacity of OC-48 or 2.5
gigabits per second, stretches along six major routes from east to west and
north to south.

Velocita chose to use Lucent Technolo-gies Inc.’s (www.lucent.com)
True-Wave RS optical fiber cable in the network. The cable reportedly supports
more than 80 wavelengths per fiber strand.

As a result of building alongside AT&T rights of way, the Velocita
network will span more than 18,000 miles. The total mileage hinges on whether
Velocita is about to buy the 7,100 miles of dark fiber from AT&T as planned.

The network is expected to be completed during the first quarter of 2002, and
will link more than 50 metropolitan areas and most Tier 2 and Tier 3 cities,
according to the Velocita spokeswoman.