Labatt uses local firm for long-distance call promo

BluephonelineBy TARA PERKINS



Labatt Brewing Co. Ltd, wants to pick up the tab for your long·distance calls this summer, and a Kitchener company, OnlinetelCorp., has shown them how. In a wrestling match for precious summer business, brewers have sweetened suds with offerings of T shirts, compact discs, even cellphones and pagers.

But this promotion doesn’t require any purchase. It does require callers to listen to ads chosen specifically for them, before their call goes through. Onlinetel, co-founded by longtime Waterloo residents John Stix and Jody Schnarr two years ago, has developed a Voice Over Internet Protocol network that allows voice information (phone calls) to be sent over the Internet rather than phone-lines. Onlinetel software connects calls free after playing a brief message ad.

The Labatt promotion will use On’ s network in Ontario, The network includes most communities in the province. Residents of these areas can have their long-distance calls within the province covered.

Stix, executive vice-president of marketing for Onlinetel, said the company has now deployed its network across Canada and is pursuing advertisers in hopes of offering free long distance country-wide by next year.

Onlinetel’s technology makes distance irrelevant to the cost of long distance calls because voice data can travel for free over the Internet.

Stix said Onlinetel had the Ontario network established early this year, and approached about 30 advertising agencies with the concept. Labatt is the first company to sign on and now holds exclusive rights to the service in Ontario, in partnership with Onlinetel.

“Labatt, right from the first meeting, just grabbed (the concept) and went with it. It didn’t take much to sell it,” Stix said. Labatt will not disclose the price paid to Onlinetel.

A Web site for the promotion,, allows users to create a profile and get a PIN number to make their calls. They are asked for their beer preferences, general interests, and phone numbers and must verify they are over 19. They are then given local access numbers for the service.

Stix said demographic information collected is used to choose which of hundreds of Labatt’s messages the caller hears. The service can also be interactive. Callers may be asked to press two if they like the service, or to press three to be connected directly to Labatt’s customer service.

Schnarr, president and chief executive of Onlinetel, said the company’s concept allows marketing to be highly targeted. An advertiser could target one neighbourhood in Ottawa, he said, and have all residents in that area hear about an event at a local bar.

Schnarr said Onlinetel is not too concerned about competition, sighting large barriers of entry including the network.

“You can’t really make it any more appealing than free,” Stix said.

Fibernetics – Provider of the Month June 2009

myvoipWhat are your best features?

The Fibernetics Digital PBX provides features associated with much higher priced systems. Over 29 features including, Unified Communications Functionality, Voicemail to Email, Find Me Follow Me, Call Queueing with ACD, Distributed (Remote) extensions, Conference Bridge, and many more, all included with the system, there are no sell-ups or so-called premium packages, all features are included.

Perhaps the most significant feature is our Survivability Guarantee. We can guarantee that calls going into our customers business will always be answered, and routed to the proper person, even in the event that a local condition has caused the customer location to lose connectivity with our network.

Which of your services are you most proud of?

The Fibernetics Digital PBX includes free local lines. There is no monthly fee for local line service, regardless of the number of lines. There are no annual license fees, or any hidden access fees. Customers that buy the Fibernetics Digital PBX eliminate their monthly local line phone bill forever.

What sets you apart from other VoIP Providers?

The fact that we are both a CLEC and the ISP. We can manage the call path end to end, and provide true QoS on every call. All of our voice calls transit over our private managed network, end to end. Fibernetics Digital PBX voice calls never touch the public internet. Also, our technology has enabled us to lower the bandwidth requirement necessary for a toll-quality voice call. We have the ability to provide up to 20 concurrent toll-quality calls over a standard DSL connection.

What is your best plan? What comes with that plan?

Our plan is simple. There is only one plan. Purchast the Fibernetics Digital PBX Phone System and you never have to pay for business phone lines again once our system is installed. Fibernetics will need to provide the data connectivity based on your requirements (we can provide any level of connectivity from DSL to MPLS to Fiber). Again, based on your requirements that connectivity may be used for both your internet and your voice services.

Which area do you provide your service to?

Our Digital PBX Phone System service is currently available anywhere in Ontario and Quebec where Bell offers DSL service, and later this year will be available across the country.

What advice would you give new VoIP users considering switching from POTS to VoIP?

If your VoIP provider is not both a CLEC and an ISP, they cannot provide true QoS, as calls will get handed off to various providers and will switch networks. Each time this happens, there is an opportunity for a negative impact on call quality. I would advise anyone making the switch from POTS to VoIP to carefully assess whose network their prospective service provider is using (if it is not their own).

Can you name 3 advancements that greatly enhance VoIP? Or 3 advancements that could/would enhance VoIP?

I believe that the biggest advancements that enhance VoIP are designed and built into the Fibernetics Digital PBX. VoIP simply cannot offer the reliability business demands when utilizing the public internet. By using a Private Managed Network and our own network devices at the customer premise and in our data centers, we can reduce the bandwidth necessary without sacrificing any quality.

Can you tell us a bit about your company and provide a brief background on the company.

Fibernetics specializes in providing integrated communications solutions that leverages internet connectivity at your business to deliver free business phone lines and full PBX functionality.

A one time charge is all that is required and your business can start realizing the cost benefits and added features of this proven technology. Fibernetics is an operating competitive local exchange carrier (CLEC), and an internet service provider (ISP) As an approved federally regulated CLEC, Fibernetics is fully interconnected with the Bell wireline and digital network infrastructure. Fibernetics voice and data network coupled with our broad range of PBX devices provides an all in one solution which is scalable, dependable and delivers significant savings to your bottom line. Fibernetics is regulated and approved by the Canadian Radio-television and Telecommunications Commission (CRTC). Fibernetics is the parent company to,,, Vonix and CanCall International.

Also, what are your latest and greatest products?

Freephoneline is a desktop application that resides on a customer’s computer that is free to download. This service provides a home phone replacement by turning your computer into your brand new free home phone service. This application is media based and is paid for by media companies across Canada.

Worldline provides residential flat rate Voip long distance services across Canada that can be used without needing a computer or internet connection. Worldline’s services are priced to be the lowest in the country and include services for home phone and cellular long distance calling. is Canada’s lowest cost dial-up and high-speed internet service provider. The focus is to deliver fast, dependable unlimited internet services to Canadians coast to coast at a price that everyone can afford.

10-11-295 is a “dial around” casual calling service that provides domestic and international per minute long distance calling for all existing Bell customers in Ontario and Quebec.

Do you have any exclusive promotions for VoIP Review, MVP users?

We would like to offer free long distance cell phone calling within Canada for 2 accounts for one year for any company that installs our Fibernetics Digital PBX Phone System.

Exchange Magazine Worldline – A History

Exchange2009_coverFifteen years ago, Bell Canada was in the final stages of deregulation. That mighty monopoly, founded in 1880, would, on its 100th anniversary, start a deregulation program that, when completed in 1997, would leave it a fraction of what it once was. During the later years of the program, entrepreneurs scrambled to find their place.

This is a story about two friends turned entrepreneurs.

Deregulation triggered an unprecedented interest in telecommunication. Opportunity was the driver: if you could digitize it, transmit it and decode it, you could make a lot of money. This was three years before the launch of the Blackberry, the very beginning of a cellular revolution. It was a time when digital technologies were leapfrogging analog competitors. The computer was establishing itself in consumer markets. It was a time for innovative ideas. “Back then we were scared,” says Jody Schnarr, CEO of Fibernetics. He and long time friend/business partner John Stix, who is Marketing Director of their Kitchener-Waterloo based Competitive Local Exchange Carrier (CLEC), were worried about the challenges of self employment, about risks involved in creating a working business model that would generate income for the two. It was a “healthy scare,” because it raised concern and generated a willingness to learn from the daily rigors of sales and marketing.

Their learned approach helped them design a communication empire that today goes head to head against Rogers, Bell and Telus.

While working for separate companies, the friends started to dabble in the long distance calling business. Schnarr, who is a gifted technological tinkerer, said they “found out you can buy and sell long distance service,” which in 1994, was very new. Trying to access grant money, the two developed a long distance business strategy. The process included identifying the potential market, so “we went and knocked on doors to find who would take the service,” says Schnarr.

They hypothesized people in Stratford wanted to call people in Kitchener-Waterloo “because there was a very close tie.” “We knocked on about 700 doors and most said they wanted it,” so Schnarr and Stix were empowered with a list of 700 people apparently willing to pay $10 a month to call the Waterloo area. They found a supplier to provide technology that Schnarr could use to connect the two locales together. The cost was about $15,000. “We put the service in, got it running” … and “none of them took it.”

They spent two months “calling, begging.” In the end, they signed up 70 customers. “We had $10 a month from 70 customers – $700 a month. There was a flat cost of $1000 a month.” They had developed a formula to go broke. Scrambling to leverage what they built, they developed an idea: instead of selling a long distance service to the households, people could listen to an advertisement prior to connecting and receive a free long distance call. In 1994, long distance cost about 40 cents a minute. Their research said, while Stratford residents wanted to buy the $10 service, they didn’t want to sign up with a new company. “Everyone wants to use it, but they didn’t want to change. All we had to do was come up with a way that everybody would use it,” explains Schnarr.

That adaptation turned a quickly failing business into a fledgling communications/ advertising company. “We thought about getting someone to pay the $1000 monthly bill, to let everybody use it for free.” The advertiser would get a new forum to communicate their message, and the public, after hearing the advertisement, will be able to make a free long distance call. Car dealer Gary Stockie bought the concept. They changed the phone number to 662-GARY, and launched their first PR campaign. Next-day coverage in the local newspaper prompted 4000 households to use it that first day. “The town just went nuts. At the end of it, we had 8000 household using it a day,” says Stix. “We started, we were bankrupt in two months, then we were back up in three months,” says Schnarr. The future was brighter.

“Out of necessity, we came up with the idea that everybody in the Stratford area wanted.” Further, what they created was scalable. “The service was up, working and there was nothing for us to do,” says Stix, “So we just started going to every single tiedin area. We brought Guelph into Kitchener/ Waterloo, and looked at Greater Toronto. We basically did 40 to 50 sites. We were channeling a tremendous amount of calls per day at the time.”

They looked at revenue streams, creating a “wheel” where 20-25 ads would go into a rotation. “We went on building those out, and once we had them all covered we sat back and wondered, ‘what can we do next?’” says Schnarr. By 1996 Schnarr and Stix were fully entrenched within the telecommunications industry. They were hearing rumblings about “voice over internet protocol” (VOIP). The vision was great, but the equipment wasn’t available. So Schnarr started to fabricate their own equipment to convert analog into digital and transmit between two cities. They made it work, but found that the integrity of the internet lines were “pretty awful”.

Over the next few years they continued to play with evolving technology. “It was the only way we could bridge two sites together, without having to pay a tremendous amount of money for long distances.” Standards had not been set in the internet world and there were too many variables, so they created their own network and started to tie together communities in southern Ontario. “We tied in London, Kitchener, Toronto , Ottawa, Hamilton and a couple of others in a giant, VOIP mesh, and we launched the Labatt Blue line.” The Labatt Blue line was a promotion network where a person would call the number 664-BLUE and then in turn call select major cities. “We built that company up and called it Onlinetel Corp.” They sold it in 2001, to a company operating out of Toronto, for an undisclosed amount.

The building of that network taught Schnarr and Stix some core principles about their industry, most importantly, that networks must be sustainable. The Labatt Blue Line was supposed to last two months, but it functioned for 14 months, generating 300,000 calls a day and the interest of a buyer. In the end Labatt executives didn’t want to write that big of a cheque – “so it ended,” says Stix.

When Onlinetel was sold in 2001, the two took a break. But after two years of golf and sunshine – the fulfillment of their non-compete clause – they started another company, Worldline, a residential service offering long distance service for $3.95 a month. “It’s basically very low cost, with almost zero margin.” The goal was to go big. “I always wanted to get into telecommunications in a deeper level. I had a goal to be a CLEC, a Competitive Local Exchange Carrier – basically, you could put your own fiber in the ground, you connect to Bell and you have your own phone lines. We know we were fantastic customers for Bell, we had given them $15-$20 million for phone lines in our time, we know what the perfect customer is like,” said Schnarr.

The long distance service was just the new beginning. “We started our dial-up internet service called The internet is a perfect customer for a CLEC.” When the separate companies combined users , they have tremendous volume. “We built up $2.95 and Worldline into a good revenue base, and used that revenue and buying power to build our CLEC. We called it Fibernetics, then we simply switched from other carriers to our CLEC – Fibernetics.” In essence they bought lines from themselves. “Those two customers [Worldline&] didn’t make a great deal of money on the market, but they spent a great deal of money on the carriers, so now they spend a great deal of money with Fibernetics. We have two great customers, it’s laterally integrated. We control every piece of the puzzle,” says Schnarr.

In July 2007, through their Worldline operation, Schnarr and Stix bought back Onlinetel, the former Labatt Blue Line company for what is described in a Newlook Industry press release as a “$2,250,000 aggregate consideration”. “We’re approaching 100,000 Worldline customers paying flat fees like $3.95 for all of Canada … You can call anywhere in the United States, and 50 international countries for $13.95 a month, nobody has every offered that before, and that is unlimited,” says Stix.

Infrastructure is one thing, marketing the structure once built is a different process altogether. But the two learn quickly. Expanding the model designed with the Labatt Blue Line campaign, Stix developed a unique affiliate program that works with media outlets and associations throughout Canada. “We had an idea of going to the Toronto Sun, and said you can provide value added services to your readers and in turn you can also share in the revenue. So [the Sun] put up the media dollars to help promote the service.

“Fibernetics is the phone company, all the services ride on this network, there are thoughts that this would become the number one brand,” says Stix. Fibernetics is a new service, but Stix says, the product is not new: “our first press release said that we have a new business gateway that makes business calls over the internet – that was in 2002.”

The whole industry had some difficult times trying to make VOIP work. “We feel it ‘s taken us the last three years to get it just right,” says Schnarr. “We created a new approach to a phone system that uses our network with the concepts of digital voice. The advantages of having our own network, and coming up with a model where someone can buy one of our phone systems, and cancel all their phone lines so they don’t have to pay us for their phone lines, is new.”

Throughout 2008, Fibernetics beta-tested both residential and commercial applications in Waterloo Region. Economical Insurance was a beta site and liked it so much they held an event to encourage 2500 broker offices to take advantage of the offer. As a subscriber with Worldline for over a year, they’ve developed their own service called Economic Call, “which is our residential service, they promote it, customers call us, and we sign them up.”

Fibernetics officially launched on January 5, 2008, as they placed the phone system and internet service in 70 beta sites. Currently, they’re installing 4-5 units a day. Interested readers can call 1-877-406-1333 for more info about the service.

To highlight the flexibility of their phone system, “We’ve put a couple in trucks,” says Stix. The cost of the phone system is $1295 and includes a PBX box and phone units. The system is feature rich, says Stix. “It’s a fantastic product on its own even if you have to pay for your phone lines …. We’re going to marry it all together into one solution.”

“Phone lines are going to go away over time. We know that’s going to happen, so that’s what we’re going to do, what we want to be is a internet provider. This whole exercise is to get all the internet customers out there by helping them get off their phone lines and getting them a proper, phone system that has the features and technology built into it. Instead of waiting for it to just happen, we’re striking first.” The company is hiring aggressively. They already have a fairly substantial team, and are looking to expand their operations locally and across North America. Fibernetics is a international CLEC, with offices in Montreal, Dominican Republic and Bulgaria. Gary Handleman, Senior PBX Engineer, is in Montreal. “He’s been working on our phone system since 2004, when we expanded to Dominican Republic, and in Bulgaria,” says Schnarr. “He’s been working on our own system and at the same time putting together the feature sets, one by one to get to our final product.”

“Although we’ve been in business for a while, we feel like we’re just launching. Really this is the dream,” says Stix, “where we feel like we’ve accomplished what we wanted to be. It took a long time, there was so much build up, paying for the network, raising a pile of capital, developing our own residential business line, crossing that over to our own network – it’s a dream,”he repeats. “We’re going to go from $10 million, through the roof,” says Stix. “We’re channeling $5 million worth of minutes of long distance a day on this network.”

“We’re born and raised in Waterloo, we all live here, we have our families here, we don’t plan on going anywhere,” adds Stix. For the time being, the two will focus on expanding their networks. “We have applications for CLEC in New York City, and we’re looking at a number of sites internationally to build our international CLEC service.” Schnarr says, “the end goal is to be a very large internet provider, because that‘s what people will be buying, with applications on top of it.”

Stix adds, “I don‘t know where the end is but I do know, when the majority of people in Canada, in the same breath, can say, ‘Telus, Bell, and Fibernetics’, I will know that we have accomplished our goals.”