NextWeb Makes Next Move

By Colin C. Haley

August 30, 2005

The fixed-wireless ISP snaps up a rival to enhance its California coverage.

NextWeb said today that it will buy 1st Universe to strengthen its network, a system built on many of the specifications included in the emerging WiMAX standard.

Financial terms were not disclosed, but NextWeb claims the deal is the largest cash acquisition in the fixed-broadband space.

"1st Universe has been a strong competitor in the Southern California fixed-wireless broadband market," said Graham Barnes, NextWeb founder and CEO, in a statement. "We are pleased to extend NextWeb's pre-WiMAX carrier-class Internet service to all 1st Universe customers."

Founded in 1999, 1st Universe, of Huntington Beach, Calif., was an early entrant in the fixed-wireless space. It was started with money from its founders and the company never had to seek venture capital financing. 1st Universe operates its primary data center in Irvine, Calif., and has hundreds of business customers ranging from enterprises to small offices.

Fremont, Calif.-based NextWeb provides service to more than 2,500 businesses in Los Angeles, Las Vegas and San Francisco. The company recently raised $3.5 million in new financing to fund expansion.

NextWeb spokesman Eric Warren said some of 1st Universe's employees will join the company. 1st Universe's management team will not.

Fixed-wireless broadband providers offer an alternative to business DSL or T-1 service from regional telecoms such as SBC and Verizon for business customers. They stress cost, customer service and reliability in pitching new customers.

Fixed-wireless companies appear to be gaining some traction. For example, TowerStream has been steadily expanding into new markets over the last year and recently partnered with Voice over Internet Protocol giant Vonage.



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