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BROADBAND—Totally Wired

David Rozelle’s altrio may have a whimsical name, but its broadband goal is as serious as it can be David Rozzelle Titles: President and CEO Company: Altrio Communications Inc. Age: 54 Birthplace: Bethesda, Md. Education: Bachelor’s degree in psychology from the University of Maryland; law degree from George Washington University Most Admired Person: Leonardo da Vinci, a man who was brilliant but also very human Personal: Married, one daughter David Rozzelle has plans. He means to create the largest high-speed broadband network in Southern California, starting with the Valley. And with $125 million in recently-acquired venture capital to back him up (to go along with $25 million he had already raised), Rozzelle might at least have a good start. He has the backing of the Frontenac Co., Bessemer Holdings, Bank of America, SSB Capital Partners, Soros Private Equity, Royal Bank Capital Partners and Grove Street Advisors. Rozzelle’s five-month-old Glendale-based Altrio Communications is poised to begin the first phase of what he says could be Los Angeles’ biggest telecommunications project ever. Starting in Pasadena this fall, moving across Glendale and through the Valley by 2003, Rozzelle’s broadband network could ultimately reach into all of Los Angeles and Orange counties. As planned, Altrio’s network of fiber optic and coaxial cables will allow users to receive Internet, cable TV and telephone service through one line, at much higher speeds than now. Jonathan Kramer, head of West L.A.-based telecom consulting firm Kramer.Firm, says Altrio appears to have the seeds for success. “But at the end of the day, it comes down to customers and cash flow. If they can serve their customers and generate a strong cash flow, then they’ll be successful,” Kramer said. “People are not only ready, but they are hungry for a simple solution for a telecommunication void. They want cable, Internet and telephone in one bill.” Question: How were you able to secure the venture capital necessary for the business when money for others in the telecommunications field has become so tight? Answer: Getting the venture capital was a major obstacle for us. We had to talk to a lot of people and it was a very long and drawn out process. It’s tough if you’re in the telecom business, in particular. But this is a very tough lending environment for everybody, and now we’re putting together another package for banks. Q: Your plan is to create a vast network throughout the Valley and, later, all of Los Angeles. Isn’t that awfully ambitious? A: We’re going to start slow, one neighborhood at a time and one area at a time. We have to get all these different permits and all these regulatory approvals and it’s going to be difficult. But we hope to do it slow and deliberate. Q: Are you going to blanket the entire Valley with the network so that every home and business has access? A: No. It’s a network designed in an extremely capital-conservative way. We only place capital in the network if we have a revenue opportunity (to reach enough customers). We’re not going to extend the network out if there is no demand. Q: Why did you pick Los Angeles as the first city to offer your broadband service? A: We like Los Angeles because we’re very familiar with it through our consulting practice. We were telecommunications consultants to a number of cities in the Los Angeles area, some of whom we helped to build telecommunications networks and other people we helped with master telecommunications plans and to design networks. Q: How is broadband different from, say, cable TV or telephone service? A: It’s not your father’s Oldsmobile. We’ll be your telephone company, Internet service and cable television service in one. You’ll see a lot more interactive services where the customer is watching television and a commercial comes along about an automobile and the customer wants information, so he clicks the icon and immediately goes to the site on the web that has information on that automobile. The customer can look at the automobile and change the color of it and then order a CD with all that information and then return to the program they were watching at the point where they left it. Q: What are people going to have available to them that they don’t have now in one form or the other? A: You could easily download an entire movie from our network and it would take just a few minutes. In fact, the studios want to provide movies directly to customers so that the customers don’t have to go to the theater and the customer doesn’t have to go to Blockbuster or HBO, and they get to keep more of the money. Q: Sprint had to scale back its plans for broadband service in Phoenix last year due to lackluster demand. What makes you think you will succeed where others, like Sprint for instance, are struggling? A: We’re focusing on the Southern California market and nowhere else. We know this market and we know what we have to do to succeed here. Other companies are building networks all over the country and that’s just not very efficient. We feel there is a demand for our service. Q: Besides building the infrastructure, what else do you need to do to be successful? A: One of the most challenging things will be to provide the services that we will provide, but also to give the customer service that people deserve. The network will fail if it’s as technically sophisticated as we’d like it to be and the customer service is bad. Just ask a cable company about that. Q: Your plans to cover Southern California will require a lot more than the $125 million in venture capital you’ve recently received, right? A: None of it will be cheap. It’ll cost hundreds of millions of dollars. We’ll go to the capital markets and show what we’ve done. But it will be a long process. Q: Why is it important to be the first to offer state-of-the-art broadband service in Los Angeles? A: It’s important (for a few reasons). One is credibility with the customer and the other is credibility to the capital market. The other is the infrastructure development. (We) need to develop the human resources to provide the level of service that customers are entitled to and give us the opportunity to attract the best people that we can possibly get. Q: When will the first grid of homes go on line? A: We’re looking at the third quarter of this year to have the first neighborhood hooked up. It’ll be very exciting You sort of feel like a pioneer, in a way, giving people something that they’ve never had before. Q: How did you come up with the company name? A: I’m not sure which of us came up with it, but we all agreed Altrio was a good name. It’s supposed to be all three voice, video and high-speed data. Some people think it’s supposed to be about the three of us (co-founders Rozzelle, Edward G. Liebst Jr. and David Large), but it’s not. Altrio is a word that doesn’t mean anything and our ad agency wants us to change to something catchier, but we won’t. If Xerox can be a success with a word that doesn’t mean anything, then so can we.

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