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Small ISP sells business clients

BOSnet Communications sells off its corporate clients but can't unload thousands of "free Net access" dial-up customers.

Plagued with customer service complaints, BOSnet Communications sold off its corporate clients on Friday, but couldn't get the buyer go for an alleged sales pitch to also purchase thousands of "free Net access" dial-up customers.

The sale is another sign of the troubles facing small Internet service providers as they try to provide customer support in the face of increasing competition from mid-sized ISPs as well as national telephone companies entering the local Net-access arena.

BOSnet has been bombarded with hundreds of phone calls a day since it took over former USFreeway customers in March. Customers complained that they never received their start-up kits or were billed incorrectly after paying a one-time fee of $25 to $45 for Net software.

On Friday, BOSnet sold 30 of its corporate clients for an undisclosed amount to another Charlotte, North Carolina, Internet company, WebServe.

BOSnet President John Wind was not available for comment today on the sale, but said in an interview last Monday that BOSnet was not actively looking for buyers.

However, when WebServe got wind of BOSnet's trouble with its new dial-up customers the two-year-old company hit the pavement targeting BOSnet's corporate clients such as Time Warner's local operations, a local telephone company U.S. LEC of North Carolina, and Nucor Corporation, a national steel company. BOSnet then approached the company on Tuesday to cut a deal before WebServe gained the accounts outright.

"We'll be transferring their customers over to our network this week," WebServe president Lee Blakely said today.

But WebServe, which has about 1,000 dial-up users of its own, won't be buying the former USFreeway customer accounts or any other BOSnet dial-up clients.

"There was some talk of buying the dial-up business, but there had been too many problems with that business, and we didn?t want to get involved," Blakely said.

North Carolina is becoming a hard place for dime-store ISPs to survive, as players like Bell South and AT&T move for large market shares, undercutting pricing and offering more customer support.

Better service is what some former USFreeway customers are looking for.

After receiving charges on their credit cards, USFreeway customers were sent a note in March stating that BOSnet would be their new Internet provider. Many customers, who signed up as far back as January, never received their software even after BOSnet acquired their accounts. USFreeway's Web site and phone number disappeared, and BOSnet's lines are not answered by live operators, which left customers frustrated.

By April 15 all of the software was sent out, said Wind. But customers still complained technical and billing problems, and their almost 500 phone messages per day are often not returned.

BOSnet sent a letter to customers today stating, "We have been swamped with calls and emails concerning the acquiring of USFreeway customers. It would be very expensive and very time consuming for us to answer every call and email that we have received in the last few weeks."

The letter suggested that customers with a billing dispute send documentation of the problem via fax.

Wind said last Monday that the company was not looking for a buyer.

"We talk once or twice a week with people that are looking to take over our user base. If the right deal comes along, certainly we will sell. We're not openly for sale, we're open to discussions. But it would have to be the acquisition of all customers," Wind stated.

However, Wind told the Charlotte Observer on Friday that he has been unable to find venture capital for the business, and that his several hundred-thousand dollar line of credit with a local bank expired. He also said he will sell about $80,000 in computer and other equipment.