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Jato offers service in Denver, plans IPO

Jato Communications, a newcomer to the national high-speed Internet game, will launch its digital subscriber line service in Denver.

Jato Communications, a newcomer to the national high-speed Internet game, will launch its digital subscriber line service in Denver today.

The company is set to offer DSL, an increasingly popular Net access option that shuttles data at high speeds over standard phone lines, in many so-called secondary markets in order to secure a foothold before competitors move in.

While rivals Covad Communications, NorthPoint Communications, and Rhythms NetConnections fight with one another to roll out DSL service in larger markets such as New York, Los Angeles, and the San Francisco Bay Area, Jato intends to offer service in several smaller cities, primarily in the Southwest and Midwest, according to the company.

Jato will expand its offering in Colorado in July and will roll out service in 13 other markets including Salt Lake City, Albuquerque, San Antonio, and St. Louis later this year, according to executives.

Jato intends to sell DSL directly to business customers, as well as through ISP partners on a wholesale basis--a strategy that separates the company from its competitors. The company will hire a sales force and will outsource a portion of its sales efforts, executives said.

"We don't want to be dependent on limited distribution channels," said Jato chief executive Brian Gast. "You're not limited to just the marketing and sales efforts of your partners. You can control your own destiny."

If Jato's destiny is anything like its competitors, the company will do well. 1999 has been a good year for the high-speed upstarts.

The three major national DSL providers all had stellar initial public stock offerings in recent months, hitting stratospheric valuations--typically reserved for Internet stocks, not equipment and facilities companies--literally overnight.

Gast said Jato intends to file for an IPO before the end of the year.

"Our focus hasn't been to just rush out and raise money because it's there, but to make sure the company has the infrastructure to operate as a public company and provide predictable results," Gast said.

Jato is likely to add a national ISP partner and strategic investors within the next 60 to 90 days, he hinted.

The company also expects to offer some service targeted at consumers on a limited basis, Gast said.