It wasn’t that the founders and owners of Fibernetics planned to launch during the first major recession of the new millennium. But, honestly, they couldn’t have picked a better time.

John Stix, co-founder, co-owner and executive vice-president for sales and marketing of the fledgling telecom firm says that it’s because of the recession that many corporations are eager to check out the cost savings that Fibernetics has to offer.

You may not have heard about Fibernetics yet, but that’s going to change. The Kitchener-based company has joined the hallowed ranks of CLECs (competitive local exchange carriers). There are only three in Ontario and the other two are Rogers and Telus. CLEC is the highest designation a phone company can reach in Canada. That designation given by the CRTC – which also regulates CLECs – gives Fibernetics the same rights and privileges as Bell Canada, and gives Fibernetics “a fibre connection into the heart of Bell,” explains Stix. “Vonage and companies like that buy Internet backbone from companies like us so they can provide customers services and charge for them.”

It hasn’t been easy. Stix and long-time friend Jody Schnarr, who is also Fibernetics president, CEO, and co-founder, have worked in the telecom industry since they left school. Stix describes it as an “arduous journey” of close to 15 years in a very capitalintensive industry. He says they flew under the radar for a long time, until the February launch of Fibernetics’ new services.

It starts with a box-like device that they designed and manufacture. It is packed with proprietary software. Plug a DSL connection into the back of it and your phone lines are on Fibernetics dedicated Internet connection. That gives you access to the Bell fibre optics system. It’s a closed network which allows Fibernetics to ensure call quality.

Stix estimates it cost about $10 million to develop the device and software, for which businesses pay a one-time fee of $1,295 that will get them two phone lines. Each additional phone line costs $295. Businesses can keep all their phone numbers – only their provider changes – and the cost.

“Businesses accept the cost of phone lines as a natural cost like heat and hydro,” says Stix. Transferring to Fibernetics dramatically reduces the cost of phone lines for everything from mom-and-pop pizza shops to major corporations.

They ran a pilot program in Kitchener, Waterloo and Cambridge this year with 40 companies and the response was big. “From small companies to a very large developer it worked beautifully,” says Stix. “The buzz is just amazing.”

Long distance calls, especially overseas, do cost, but a lot less than any other phone carrier, and in this economic climate that’s a huge plus. “It’s a fully sustainable business model,” explains Stix. Their continuing income comes from providing Internet services to clients. For $89.95 per month a business can get a DSL connection that will accommodate up to 20 phone lines. “We’re a new age telecom company,” he explains.

The $10 million investment it took to set up Fibernetics was self-generated private money. Stix and Schnarr already had steady revenue from a residential phone internet service company they had called Worldline. Actually the network for Fibernetics is paid for by that residential service – a network that has unlimited bandwidth available. They haven’t even fully rolled out their marketing campaign and they’re swamped with orders and inquiries – a major player in the financial industry that has 500 phones in 48 offices across Canada wanted to meet with Stix pronto. He believes that getting that meeting would have been a lot tougher before the economic downturn. Over the next year to year and a half, Stix fully expects they’ll be hiring 100 to 150 people. The future looks so bright they’re thinking of hiring a consulting firm to help them manage growth.

“We’re the first one-stop shop in the history of Canada for phone systems,” crows Stix. “We manufacture the phone system, we are the phone system provider, we are the telecom company that provides the phone lines, and we are the Internet service provider. We believe we’re on our way to being the next Bell.”

Currently Fibernetics has about 120 employees world-wide, about 25 are at their head office in Kitchener. They have Fibernetics offices in Toronto and in London, Ontario. They also have a call centre in the Dominican Republic and a software development firm in Sofia, Bulgaria. But it’s here that they need to hire, starting with developing a larger HR department to hire the computer science grads, customer service people, installers, sales people etc. they will need in the coming months.

Stix is determined to preserve their youth-oriented, open corporate culture through all this expansion. He really doesn’t want to lose the advantage of size that the company has now, so they’re keeping infrastructure costs down. “We can turn on a dime and we want to retain that in our company culture. We’re the Google of telecom.”

“Small businesses can compete against the big boys at a fraction of the cost.”

Fibernetics, a KW based technology firm, has developed a technology which leverages a business’s existing data/Internet connectivity to deliver free business phone lines.

The small PBX device resides on a business’s network and offers a full range of PBX functionality.

“This device is a first in the Canadian marketplace and will change the way a small to medium sized business perceives its telecommunication costs,” said John Stix, Fibernetics Vice President of Marketing.

“The return on the investment is rapid, with long term savings which will allow for dollars to be spent elsewhere. Small businesses can compete against the big boys at a fraction of the cost.” After purchasing the device for $1,295.00, the business will not have to pay the normal monthly business line costs that average $55.00 to $75.00 per line, per month. The device starts at two lines and is scalable to accommodate other larger sized businesses.

The Fibernetics PBX not only delivers free business lines but an array of features which normally would cost too much for a small start up business to even think would be affordable. Unlimited extensions, unlimited local calling, voicemail to email, follow me feature, conferencing, music on hold, an automated attendant and many more great features are all included.

Fibernetics is a CRTC approved competitive local exchange carrier (CLEC) and delivers a full range of data and voice services. “We are a phone company who wants to replace your existing Internet supplier,” said Francisco Dominguez, Vice President of Technology. “We offer businesses the same Internet access they have now and in turn provide all these features and phone lines for free when buying one of our devices.”

“Fibernetics believes that reliability, scalability and call quality will satisfy even the most demanding business owner or VP of communications.” Said Stix. “All calls are over the business’s own private network and Fibernetics national infrastructure.”

By SAMARA CYGMAN

The digitized voice of John Stix came through the phone with unprecedented clarity and strength.

Paying high rates for long-distance calling is over in Calgary, says one of the founders of Worldline – a one-year-old venture new to the Calgary area, poised to abolish charging per minute for long-distance calling, using voice over Internet protocol (VOIP) technology.

How it works is simple – callers phone a local Worldline Calgary phone number, listen to a five-second greeting, and enter the Canadian long-distance number they want to reach, all for only $7.95 a month.

And long-distance calls to the U.S. and overseas are only a few months away.

“We take your analog voice, digitize it and send it out over our own Internet that we have right across Canada – we did that to ensure the call quality is fantastic and call security is good too,” says Stix.  “We are the first company to provide this kind of service in Canada nationwide.”

Started in Toronto, Worldline enjoyed tremendous growth within their first year as thousands signed up for their service, which has now expanded into every major city In Canada.  And now they are launching In Calgary.

Customers do not require a computer or an Internet connection to enjoy Worldline’s service, don’t have to change their regular telephone service providers and don’t have to worry about speaking into a specialized mouthpiece or attachment.

“We felt you simply can’t change the way people have been calling for 100 years,” says Stix.  “We didn’t want to teach people to dial differently so we decided to work on technology to access our service through your everyday home phone.”

What’s the catch, you might ask?

There isn’t one – unlimited long-distance calling, without restrictions, is at your fingertips, whether you’re at home or on a cellphone.

The success of Worldline marks a breakthrough for the 35-yearold Waterloo native, who joined forces with his best friend and business partner, Jody Schnarr, to bring the idea to fruition.  Stix and Schnarr jumped on the opportunity to test out the venture when deregulation was introduced in the telephone industry in 1994.

“We’ve been in telecommunications since 1994 when we got into the flat-rate, long-distance business and we noticed serious limitations to providing flat rate to customers – but in 1997 we realized the Internet can be used as an alternative network,” says Stix, adding the breakthrough came in 1998 with the first phone-to-phone VOIP call.  “The quality wasn’t good, but hey, we did it, and since 1998 we’ve been refining this technology and now with Worldline it’s working with tens of thousands of customers signing in just under one year.”

Stix and Schnarr came up with Worldline dial up – where people can purchase the most affordable dial-up Internet service in western Canada for only $5.95 per month.  He says it feels amazing to see something they have toiled over for so long finally take off and improve people’s lives.

“We’re fulfilling a need out there to help people communicate and at $7.95 a month you can talk, talk, talk and it doesn’t matter – otherwise you’re always watching your clock,” says Stix.

“This is huge for kids going to university to be able to talk to their parents as much as they need to – Worldline looks forward to providing the most least cost communication services to Calgary and the rest of Canada for many years to come.”

A Waterloo-based business offering national long-distance service has partnered with The London Free Press to offer unrestricted long-distance telephone service for $3.95 a month and a one-time $10 activation fee.

Worldline Inc. is using the Internet to deliver phone-to-phone service for less, while keeping voice quality high.said John Stix, Executive vice-president marketing for WorldIine.

“We are really excited about this. We use the Internet to deliver an unbeatable price point, it delivers efficiencies you can’t beat in a telephone system,” said Stix. “By using (the Internet) we can compress more data and it is far more efficient. It makes distance irrelevant.”

For The Free Press, it’s a chance for the newspaper to enhance its profile as the premier communication service in Southwestern Ontario,” added Sherri O’Brien, circulation sales and reader marketing manager for The Free Press.

“The thing we need to emphasize is that there areno strings attached, it is nottoo good to be true,” saidO’Brien.

“The bottom line is it works, it is crystal-clear reception. This is an opportunity for us to share with our readers an opportunity to use this service.”

In 1994 the telephone industry in Canada was deregulated, opening the door to competition for Bell Canada. By 1998 conversations were being transmitted live over the Internet, but it required computer hardware and software to make calls from personal computers.

Worldline, however, uses voice over Internet protocol, or VOIP for short, to transmit the telephone signal from a customer’s home to a Worldline office, which then transmits it over an Internet line.

Neither the sender nor the receiver needs to have home Internet service. “It really means every call is a local call. It’s the end of long distance,” said Stix. All the residential customer needs to do is punch in a seven-digit number, then listen to a five-second advertisement from The FreePress, after which the customer dials the number he or she wants to be connected to and the call goes through.The service uses existing phone lines and no additional equipment is needed.

A little audio ‘spam’, marketing and the Internet are being combined to make free cross-Canada calling a reality within a year, Vito Pilieci writes.

An Ontario businessman says it won’t be long before most Canadians can telephone each other as often and as long as they like — without paying long-distance charges.

John Stix expects advertisers to foot the bill.

Mr. Stix, co-founder of Total Free Call Inc. of Waterloo, has devised a system in which long-distance callers willing to listen to a 15-second commercial can make free, unlimited long-distance calls.

The service is already running in Ottawa and parts of the Valley, and — if all goes according to plan — the majority of Canadians could have access to free long-distance by this time next year.

“We wanted to create a hassle-free service,” Mr. Stix said. “There are no limits and you can call from any phone.”

The Ottawa service, available at 688-FREE, dodges the quirky telephone barriers that separate municipalities in the valley.

For example, a call between Jockvale and Osgoode is considered long-distance, although both communities can call Ottawa locally. But a Jockvale caller who dials Total Free’s Ottawa number and listens to an advertisement can connect to Osgoode via the Ottawa link.

The Total Free network stretches as far north as Val-des-Bois in Quebec, as far south as Smiths Falls,east to St. Isidore de Prescott and west as Shawville.

Mr. Stix, and his business partner, Jody Schnarr, started Total Free Call Inc. on Sept 1. A similar network is now being activated in Toronto.

The two businessmen are not new to cutting long-distance bills: they co-founded Onlinetel Corp. in Kitchener, which has been offering free long-distance within Ontario on behalf of beer giant Labatt Breweries for more than a year.

Mr. Stix says Total Free Call is setting up networks in other major cities across Canada, including Montreal, Quebec City, Vancouver, Edmonton, Calgary, Halifax and Winnipeg.

Once these networks are established, he can use the Internet to link them and bring free cross-country calling to more than 76 per cent of Canada’s population, he said.

Lawrence Surtees, director of telecommunications and Internet-related research for IDC Canada, said the ad-driven business model has been successful in the United States and that it’s about time someone in Canada rolled out this type of system.

“It has been running for years and years in the U.S.,” Mr. Surtees said. “Calls are already next to nothing.

“The only way you could make a go of this today is pretty much by doing what they are doing.”

Mr. Surtees said that after long-distance markets were opened up to competition in 1992, long-distance rates plunged.

Today, discount telephone phone companies such as Yak Communications Inc. can buy a block of time wholesale from telephone companies, sell it for less than three cents a minute, and still make a profit.

Mr. Surtees said Total Free Call works in a similar fashion, except that the company passes the costs of the time to the advertiser instead of the consumer.

Bell Canada welcomed the idea, saying that Canadians already enjoy some of the lowest long-distance telephone rates in the world and a service such as Total Free Call simply offers consumers more alternatives when placing a call.

“This is just a testament to the growing and intense competition that is going on in the long-distance market,” Bell spokesman Andrew Cole said. “That has been the case for a number of years and will be the case in the years to come.”

© Copyright  2003 The Ottawa Citizen