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Another little guy losing in ISP battle
Telerama, a small Internet service provider here that was once a high-tech darling, is on the financial ropes
Friday, March 23, 2007

For more than a day, Telerama customer Tom Mondell hasn't been able to check his e-mail from his Ellwood City home office -- a communication drought that's almost unheard of in today's high-tech world.

This problem was easy to resolve, but Telerama's difficulties are far from over.

Like many phone customers delinquent with their monthly payments, Telerama was cut off, leaving its high-speed Internet customers without service since Wednesday.

Telerama Chief Executive Officer Doug Luce said the high-speed connection used to link two Telerama offices was disconnected when the firm failed to pay a $30,000 bill owed to Level 3, the Colorado-based telecommunications network operator.

"They want the balance upfront," Mr. Luce said, "and we don't have the cash."

Frustrated Telerama customers jammed the phone lines at the 10-person Oakland customer service center yesterday.

The rumors on the cause and effect of the once-celebrated industry pioneer's troubles swirled on the Internet, where saddened customers posted rest-in-peace messages on tech-geek Web forums.

It turns out the 16-year-old Internet service provider is down but not out.

"We're not quite out of business yet, we're just hurting like everyone else," said Mr. Luce.

In the 1990s, there were throngs of small Internet service providers. But in 2003, as telecom and cable companies became more aggressive in their quest to be a one-stop shop for phone, broadband and wireless services for consumers, companies such as Telerama found themselves in a vise, unable to compete with much bigger rivals such as Verizon and Comcast.

"Verizon's dominance in the market makes it hard," Mr. Luce said.

In a twist, Verizon, Telerama's competitor that offers broadband Internet service for as little as $14.99, compared with Telerama's $45, could end up being its savior.

Mr. Luce, who moved the bulk of his business to Seattle in 2004, said Pittsburgh-area customers should be back online by this morning at the latest because of a deal to re-route Telerama's Web services over Verizon's phone network.

In 2001, Telerama was one of the first Internet firms to introduce high-speed wireless Internet, or Wi-Fi. Laptop users could be seen accessing the Web in such Downtown "hot spots" at the now shuttered La Prima coffee house and at all of the Big Burrito Group's restaurants.

But soon, Telerama was charging for the Wi-Fi service that was free in other places. The Big Burrito Group dropped the service in 2005 after hiring away a former Telerama employee who used to handle its account. "It's tough to shift from the customer service that the mom and pop shop can provide," but it's better for the customers to offer free service, said Zakk Weston, who worked at Telerama for five years before joining Big Burrito to do technical support.

Telerama's customer base dwindled to the local loyalists and self-described geeks who viewed sticking with Telerama as being on the right side of a battle of good vs. evil.

"It's the little guy vs. the big guy," said longtime Telerama customer H. Scott Matthews, of Point Breeze. "I could call them and get an answer in one minute and usually have whatever problem I had fixed in that time. It was worth the peace of mind to pay more knowing problems would be fixed."

But that wasn't Mr. Mondell's experience Wednesday when he lost his Internet access and spent hours trying to get a response from Telerama.

"All I wanted was some courtesy to let me know the status of the service," he said.

First published on March 23, 2007 at 12:00 am
Corilyn Shropshire can be reached at cshropshire@post-gazette.com or 412-263-1413.
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