The Press Democrat

LIFESTYLE

Wired for success

Dane Jasper has led Sonic.net, his Internet service provider, to profitability, but now he and other independents face a steep battle for survival against the cable and phone giants

By STEVE HART
THE PRESS DEMOCRAT


Dane Jasper learned his earliest business lessons on Santa Rosa's Spring Street, selling redwood seedlings door to door.

See story below

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"When I was a kid and wanted my first Big Wheel, I had to pay for half of it," said Jasper, chief executive at Internet service provider Sonic.net.

"I did that by selling little redwood trees. As far back as I can remember, I was in some business or other."

Jasper keeps a collection of his early business cards, including one from a lawn mowing service he started at age 11.

His mother instilled a strong work ethic, Jasper said.

"It was partly because she was a single mom and money was tight," he said. She also figured he'd value things if he had to earn them.

Jasper and business partner Scott Doty started Sonic as a class project in the early 1990s at Santa Rosa Junior College. Almost 14 years later, it's the largest independent Internet provider in Northern California, with 47,000 subscribers and $13 million in annual sales.

And Jasper, 33, has emerged as a spokesman for Internet independents locked in a David-and-Goliath struggle with the nation's telephone and cable giants.

In a blow to businesses like Jasper's, the Federal Communications Commission last year ruled phone companies don't have to lease their DSL lines to competing Internet providers.

Meanwhile, Congress is considering rules that would give the phone and cable companies even more control over broadband traffic, potentially hurting independents such as Sonic.

As president of the California ISP Association, a trade group representing Internet providers with about 3.5 million customers, Jasper has found himself lobbying lawmakers and regulators from Sacramento to Washington, D.C.

"I never anticipated they'd have anything to do with my business when I started," said Jasper, sitting in his corner office at Sonic's high-tech, 36,000-square-foot headquarters in Santa Rosa. It's a lofty position for someone who never graduated from high school.

Jasper is clean-cut, talks fast and sprinkles his conversation with technical jargon. He admits to being something of a nerd, saying he didn't "find himself" until he got into computer networking at SRJC.

He left Santa Rosa High at age 16 by passing a proficiency test.

"I wasn't a particularly motivated student - I've always enjoyed work more than school," he said. "In high school I was aimless and didn't want to go to classes. I ended up spiraling out."

He worked at software and electronics stores, then helped run an early Sonoma County online network, Exactus Information Service. "It had eight phone lines, so eight people could dial in and chat with each other or post messages."

Jasper enrolled at the junior college but was more interested in working inside its new computer lab. SRJC was one of the first community colleges in California to get Internet service.

"It was very slow, but it was exciting," Jasper said. He helped maintain the campus computer system while taking a full load of classes - mostly computer science.

Dave Johnston, former head of SRJC's computing services department, was impressed with Jasper's drive.

"You could give him an assignment and he might not know what to do, but he'd find out," said Johnston, now the data manager for a Sacramento education nonprofit.

Jasper threw himself into the college experience. "I was taking 20 units, working 20 hours a week, on the swim team and the dean's honor list," he said. "I had found my space in an educational institution."

That's when he met Doty, a Coast Guard veteran and computer buff who was going to college on the GI Bill.

Doty came up with a class project that used the school's new technology. "He'd use spare hardware that was sitting around to offer dial-up access to SRJC students, so they could get on this Internet thing from home," Jasper said. "I was working in the same room and helping him."

The free network turned out to be a big hit. It was so popular, in fact, that some students began stealing access.

Jasper learned student employees at SRJC were using others' personal information to create accounts and sell them to non-students.

His business instincts soon kicked in.

"I thought, 'This product is hot. People want to buy it. They're stealing it.' If there's a black market for a product and you can create a legitimate market, maybe you've got a commercial success on your hands."

Jasper approached Doty about turning the class project into a business, but his friend was skeptical. Still, Doty agreed to help with the startup and invested $3,000 for a one-third share.

They started Sonic in 1994 with two computers and eight phone lines in the back room of Jasper's mom's house. Word quickly spread through the student community.

Two other startups already were providing Internet access in Sonoma County for $20 a month. The two SRJC students charged $12.

"That really helped us grow in a hurry," Jasper said. "It probably also helped that I was 21 years old and didn't have any mortgage or kids. I wasn't even paying rent."

The business expanded so fast that Jasper had to drop out of SRJC, two classes short of his degree.

The business rode the dot-com boom of the late 1990s, growing as much as 300 percent in a single year. Sonic catered to "early adopters," tech-savvy consumers who wanted ever-faster Internet service.

The business managed to avoid some of the industry's pitfalls. While other ISPs borrowed money to expand, Sonic took a pay-as-you-go approach. "If we needed a piece of hardware, we saved up until we could afford it," Jasper said. "I really didn't know how to borrow money."

The industry began to consolidate in 2000, as demand dropped and over-leveraged ISPs couldn't afford to upgrade their systems to high-speed DSL service.

"You need cash reserves so you can adapt to changing technology. You've got to be early to market to get the early adopters," Jasper said. "We began to acquire customers of other providers, who wanted to go faster."

Today, DSL accounts for about two-thirds of its revenue. Sonic, the top-rated California ISP in one consumer survey, also is known for customer service.

Doty, Sonic's vice president and chief technical officer, said Jasper has been key to the company's success. "He's a world-class negotiator," Doty said.

But Sonic and other independent providers face an uncertain future. Today, the vast majority of Internet hookups are sold by the big telephone and cable companies.

Sonic spends $3 to $4 million a year to connect its customers over AT&T's copper phone lines. Until last year, federal law required phone companies to lease their DSL lines to ISPs at wholesale rates.

With the end of the common carrier rule, Sonic and other independents could be forced out of business. Jasper has negotiated a four-year deal with AT&T to carry Sonic's DSL service, but AT&T won't give Sonic access to its next-generation fiber optic service, known as Lightspeed.

Jasper is also worried about congressional efforts to end "net neutrality," the principle that Internet content is delivered on a first-come, first-served basis.

AT&T wants rules that would let it charge more to deliver select traffic at higher speeds. Opponents worry it would deny Internet access for those who can't afford to pay.

So far, Jasper said, the government is siding with the telephone and cable companies, who argue such tiered service will spur investment in network improvements.

"In my opinion, they've stolen the Internet," he said.

Michael Howard, an analyst with Infonetics Research, a Silicon Valley telecommunications consulting business, said Sonic faces a serious challenge. Federal policies have given giant phone and cable companies more control of the market, Howard explained. "Now, there's less competition and consumers are worse off."

Sonic may survive by becoming a larger AT&T customer, Jasper said. "If we serve more consumers on our network, it doesn't make sense to kill us off. I don't know what Sonic is going to be five years from now. But I'm confident we're not going anywhere, because we're adaptable."

Meanwhile, Sonic - and Jasper - have put down roots in Santa Rosa. Sonic's Apollo Way headquarters has a $1 million data center, the largest such facility in Sonoma County.

Jasper, who still lives in Santa Rosa, returned to SRJC several years ago to get his degree.

He's married to Tara Jasper, 28, who grew up in Occidental and graduated from the culinary program at the college. Tara, who also holds a degree in accounting, works in a winery tasting room.

The couple raise puppies for Canine Companions for Independence, the Santa Rosa nonprofit that trains assistance dogs for people with disabilities.

Jasper became interested in the program after volunteering there as a youngster.

Their latest dog is Lonny, a Labrador. "You get them when they're 2 months old, a little ball of fluff," he said. "We spend almost a year and half with them."

It's emotional when puppy raisers give up their dogs for careers serving the disabled. "It's sad and moving," Jasper said. "You see people receiving these dogs and you know how it's going to change their lives."

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Published: Sunday, Jul 23, 2006
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Dane Jasper spends ‘my whole day’ in his office at Sonic.net in Santa Rosa. As he has done in the past, he is raising a Canine Companions for Independence dog, a two-year-old Lab named Lonny, that will go just about everywhere with him until training is complete
KENT PORTER / PD
Dane Jasper spends ‘my whole day’ in his office at Sonic.net in Santa Rosa. As he has done in the past, he is raising a Canine Companions for Independence dog, a two-year-old Lab named Lonny, that will go just about everywhere with him until training is complete
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NET POSITIVE

Who: Dane Jasper, CEO of Sonic.net; president of California ISP Association

Age: 33

Family: Wife, Tara, 28

Other interests: Jasper and his wife work with Canine Companions for Independence, raising and training assistance dogs for people with disabilities.

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