Arizona Daily Star, Tucson, AZ, April 7, 2005

Local Web provider purchases bigger rival

By David Wichner

ARIZONA DAILY STAR



By sheer numbers, Tucson is losing another local Internet service provider to industry consolidation with UltraSW.com's buyout of the larger DakotaCom.net.


But the combination of the two locally owned companies will create a "bigger, better and faster" DakotaCom.net, with the planned addition of new services such as Internet-based telephone service, the company's new owner says.


"Our vision for the future is that connectivity � getting people on the Internet � is just part of the thing," said Bill Bosmeny, who started UltraSW.com in 1999.


The purchase of the 10-year-old DakotaCom.net by UltraSW.com, announced Wednesday, creates a new company with about 6,500 small-business and residential subscribers, including about 5,500 DakotaCom.net subscribers.


Terms of the deal between the two privately owned companies were not disclosed.


The combined company will operate as DakotaCom.net, and pricing for current customers will not change as a result of the deal, Bosmeny said.


Like many local ISPs, the company focuses on small-business services including high-speed Web access and Web hosting, though it also provides residential dial-up modem and digital subscriber line, or DSL, service.


All sales, customer service, and technical support will be handled by the existing DakotaCom.net team of 14 employees, who will be retained with UltraSW's staff of three, he added.


DakotaCom.net provides seven-day-a-week tech support, 7 a.m.-11 p.m.


Besides Voice-Over-Internet-Protocol, or VoIP, service, Bosmeny said the company plans new security features and online backup products to lure customers away from national providers.


Pam Crim, who took over DakotaCom from her ex-husband in 1997, is not involved in the new company. Crim said she hadn't been actively looking to sell the company, though she had gotten several buyout offers in recent years.


Bosmeny had approached her about working together in the past, Crim said, but when he came looking to buy the company last year, the deal felt right.

"I liked the fact he was a local person, and he really liked our service," she said.


Crim, 48, said stepping away from the company will allow her to spend more time with her 12-year-old son, Christopher, but she may not sit still for long.


"I'm going to take a little time off and decide what I can do," she said. "I think I'm too young to retire."


DakotaCom's sale is the latest in several changes in the local ISP industry in recent years:


  • In 2001, StarNet, the online service of the Arizona Daily Star - once the area's biggest dial-up ISP - sold its 9,600 dial-up accounts to national provider EarthLink.


  • In 2003, DakotaCom.net bought about 1,100 DSL accounts from Tucson Newspapers' FastTucson.net online service.


  • In mid-2004, locally based The River Internet Access Co. was purchased by MobilePro Corp., a wireless and broadband telecommunications company based in Bethesda, Md.


  • In January, local fixed-wireless Internet access provider Broadband Labs Inc. was acquired by Simply Bits LLC, a wireless ISP formed last year.


    Others in the local industry said they weren't surprised by the DakotaCom deal, and some said it makes sense.


    "The thing that's driving this is the same thing as always - economies of scale," said Marcus Needham, vice president of operations for The River, which has about 15,000 customers in Arizona and Washington.


    But consolidation need not always damage the local industry. Needham noted that since The River was acquired, local operations have remained essentially the same, and the company has added a dozen employees in its call center to handle customer service for other divisions of parent MobilePro.


    Other observers said the deal was a good fit for both companies, which generally have enjoyed a good reputation in the local industry.


    "We at Login are glad to see consolidation among the locals, to make them more competitive with the nationals," said Matthew Grossman, network engineer with Login Inc., which provides high-level Internet backbone connectivity to local ISPs including DakotaCom.net.


    Contact reporter David Wichner at 573-4181 or dwichner@azstarnet.com.