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BBN Beats Integrators at Their Own Game

By Shannon Henry

Staff Writer

When the Council of Better Business Bureaus decided to create an advanced Internet database for the public, it considered Electronic Data Systems Corp., IBM Global Services and Computer Sciences Corp. for the job.

In the end, none of the traditional systems integrators won. Instead, the association that represents regional consumer watchdog groups across the country chose BBN Corp., Cambridge, Mass., an Internet company.

The association's online program, which will link 152 autonomous better business bureaus, was launched this month, and searchable databases will be up by June. Two better business bureaus, in New York and Boston, have their Web sites up and running at www.newyork.bbb.org and www.bosbbb.org.

The Council of Better Business Bureaus contract, worth $500,000 over two years, shows an Internet company can compete beyond its core business. BBN was selected because it had a reputation as a top-tier Internet service provider and no other company considered had the same mix of expertise, said Stephen Rose, vice president and chief information officer for the Arlington, Va.-based association.

BBN, widely known for helping to create ARPAnet, the government-run predecessor to the Internet, has pulled away from the pack of Internet service providers with this deal, showing it will provide not only access but integration. In its fiscal 1996, which ended June 30, BBN had $234 million in
revenues.

BBN's shift comes at a time when the ISP market is shaking out. The companies that connect business and consumer users to the Internet are shrinking in ranks. Some companies have abandoned all or segments of the Internet access market: IDT Corp., Hackensack, N.J., recently returned to its original business of telecommunications and dropped its Internet access business; PSINet shut down its consumer Internet service to better serve its business customers.

Most Internet service providers now are trying to find a way to be different, whether by offering content or hooking their wagon to a larger company through a buyout.

UUNet Technologies, Fairfax, Va., was bought last year by MFS/WorldCom, a telephone company. UUNet has been applauded for broadening its capabilities through its sale.

"It's not surprising that UUNet is no longer just an Internet access provider," said Robert Pepper, chief of the office of plans and policy at the Federal Communications Commission, at a recent conference.

Beltsville, Md.-based Digex is enjoying its public offering cache although its stock has been sinking and the company is expected to be sold in the next few months. PSINet, Herndon, Va., has been disappointing analysts lately with falling stock prices and a delay in its profitability expectations.

Compared to BBN, companies such as Digex and PSINet sell "low-end" Internet service, claimed Joe Barbara, BBN's director of sales and marketing for the southeast region. "That's not BBN's heritage. We are competing with the Andersens and the EDSs of the world," he said. "Our ability to transact business moves beyond selling T1 lines."

BBN has for some time been moving toward this goal. In June, Andersen Consulting of Chicago and BBN formed a joint venture for electronic commerce. Each company has equity in the new company, ServiceNet, although Andersen will hold 87 percent, or $35 million of the pie.

"Our customers will come to rely on this utility for Internet-based commerce the same way they rely on traditional utilities for power transmission," said George Shaheen, managing partner of Andersen, in announcing the plan.

ServiceNet is slated to soon announce its first customers and a CEO, said Vaughn Harring, a BBN spokesman. In addition, BBN plans to roll out more electronic commerce offerings on its own in the next month, he said.

The better business bureau association came to BBN last April for World Wide Web hosting services, before the procurement process. Companies that participated in the bid process for the online project included Plano, Texas-based Electronic Data Systems, IBM in Armonk, N.Y., and Computer Sciences Corp. in San Diego, Rose said. He declined to identify any of the other bidders.

BBB Online will link the 152 autonomous better business bureaus around the country, allowing consumers to check out companies and potential purchases online. The bureaus will use the databases to uncover scams by finding connections between companies and owners, said Rose.

In addition, the bureaus will analyze and put their stamp of approval on electronic commerce sites that meet their standards.

"This will be one of the most visible and visited sites on the Web," said Rose.

BBN already has two lucrative, high-profile contracts for which it rarely is credited. The company runs Basking Ridge, N.J.-based AT&T's dedicated Internet access and managed network security services, a three-year, $120 million contract. BBN also builds, maintains and operates much of Dulles, Va.-based America Online's dial-up network, a four-year, $500 million contract.


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