ISACOMM

ISA Communications Services, Inc. (ISACOMM) was a long-distance telephone company headquartered in Atlanta. It was the first telephone company to offer a virtual network service to corporations and the first to offer codec-based videoconferencing services. The company was also a pioneer in shared tenant services, by which a commercial landlord includes telecommunications services in its lease package.

ISACOMM began as a concept within Insurance Systems of America (ISA), an Atlanta company founded in 1970 to write and license applications software for the insurance industry. Sensing an opportunity in the telecommunications market, ISA created ISACOMM in 1978. Several insurance companies took minority ownership positions in ISACOMM, but ISA retained majority ownership. The founders of ISACOMM were Richard C. Smith, an executive from ISA, and Kenneth H. Crandall, a principal in the creation of Satellite Business Systems (SBS). Smith and Crandall were ISACOMM's CEO and CTO, respectively. Smith later became CEO of Telcordia.

ISACOMM's business plan was to buy long-distance voice and data services from SBS in bulk and to resell the services to corporations whose networks were not large enough individually to justify their own SBS earth stations. ISACOMM contracted with SBS for earth stations around the United States and then leased ports on those earth stations to individual corporations. Thus, ISACOMM was an aggregator of traffic for SBS; at one point, ISACOMM was the second largest customer of SBS. For calls that terminated off the SBS network, ISACOMM provided seamless interconnect with local telephone companies and, where necessary, AT&T. By leveraging the technology and capital investment of SBS and other carriers, ISACOMM could produce a high return on equity even with modest operating margins.

Customers of ISACOMM understood their relationship to be with ISACOMM, not SBS. As an interstate carrier, ISACOMM was subject to regulation by the Federal Communications Commission and had to file its own tariffs, although progressive deregulation of the industry made the tariff process increasingly irrelevant.

The original target market for ISACOMM was the insurance industry, with whom the ISACOMM management had strong connections arising from the history of ISA. However, ISACOMM quickly pursued the Fortune 500 (except for those corporations who were large enough to be served directly by SBS). ISACOMM did not sell long-distance services to consumers.

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