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PSINet dashes to intranets

Internet access provider PSINet speeds up its plan to shed its residential customers and focus on the more lucrative corporate market.

Internet access provider PSINet is speeding up its plan to shed itself of residential customers and focus on the more lucrative corporate market.

The shift comes in the wake of increased competition in the dial-up market by telephone companies. Today, for example, Sprint confirmed that it is joining the fray, following AT&T, MCI, Bell Atlantic, and Pacific Bell. To help combat their march onto its business, PSI announced deals to establish Internet access in 66 Tandy retail stores nationally, including 50 Computer City and 16 Incredible Universe stores.

The deal includes a 128-kbps LAN-ISDN connection for up to six PCs per store. PSI's network offers Internet access from some 350 points-of-presence, or POPs, nationwide.

In another wholesale pact, PSINet also is teaming up with Holiday Inn in a pilot project to provide in-room Internet access. If successful, it could be expanded to other Holiday Inn hotels.

Sources said the company also is considering teaming up with IBM to provide the backbone for selling high-tech products online. New intranet offerings also are in the works, the sources said.

"This new wholesale strategy has far greater profit margin and growth potential," PSINet spokesman Brian Muys said.

UUNet, another Internet-access pioneer, is adopting a similar strategy. The increased competition is expected to spur an industry shakeout, one sign of which was MFS Communications' recent buyout of UUNet.

PSI's deals with Tandy, Holiday Inn, and if completed, IBM will all be based on revenue sharing. In effect, the company is renting out its Internet backbone like any phone or electric utility. "Our relationship with PSINet will allow Computer City and Incredible Universe the ability to offer our customers a unique, user-friendly view of the Internet," said Jim Hamilton, vice president for Computer City.

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