Re: ISPs in trouble? (fwd)

Matthew S. Crocker (matthew@crocker.com)
Tue, 12 Nov 1996 12:43:17 -0500 (EST)

> Matt,
>
> I know you probably don't think that this is going to happen, but if it
> does, isn't there a way we can perform some kind of civil and/or anti
> trust action? What they're proposing sounds rediculous.

They are not breaking any laws. What is NYNEX doing to us now that they
are not doing to EVERY one of their customers. We can't sue them if they
don't single us out. The FCC can't charge us specifically either because
then it would be a tax on the industry. That tax is left to the PUC to
decide. The FCC could force us under PUC control but we are not a
monopoly *or* a public utility.

The only thing I see happening is NYNEX or MCI/Sprint will charge us more
based on usage. This is an accounting nightmare if you do it on the T1
side. The backbone routers can barely handle BGP updates forget about
bean counting.

> I agree with you that INET access has gotten way too cheap, and MSN and
> AOL lowering their prices to $19.95 a month for unlimited access is not
> helping things. The other bone-heads in the areacode who drop their
> prices, relying on the consumers to shop by price are making it tougher
> because customers DO shop for price. The average newbie to the net has no
> clue about what a quality provider is, and we've lost many, many customers
> for as little as $2 a month price difference.

We are the highest priced in this area (You know that already though ;)
and we still get LOTS of customers. We get customer who swicth over from
our competition. We do lose customers based on price and we let them go,
we will be here when they come back. Basic dialup home users don't know
the difference in quality and will shop on price. Corporate customers
who need to get access consistently M-F, 9-5 will pay more for the
service. We service their needs better.

> Somehow, though, I have a feeling that this proposal to levy an access
> charge or some other bogus attempt to make it impossible for ISPs to stay
> in business will come to the surface soon, and I have a feeling that
> companies like MSN and AOL will survive.

AOL and MSN are not making money now. The CEO of AOL quite a while
back. Their stock is going down and customers are getting sick of busy
signals. We get a couple hundred ex AOL customers signing up a month.
AOL is the best thing that happened to us ;). They are dropping their
pricing to be more in line with their service level, but it is still not
enough. I heard rumors that AOL is in serious financial difficulties
(rumors, rumors). The President of Netcom said flat out that you can't
make money at $19.95 unlimited. The President of PacBell said the same
thing. The RBOC's will never to unmeasured service, they hate that. What
is happening to the Internet now is what happened to the voice mail
industry 10 years ago. Everybody thought that voice mail was not worth
anything and they could only get customers by charging a low rate. The
fact is voice mail is a HUGE time saver and time is money. Voice mail is
worth something. I know companies that have $150,000 voice mail systems
and they charge $3/month for access. You need to sell a lot of accounts
to pay the bills for that system. The same is true with email. Email is
an even bigger time save than voice mail and should be charged based on
what it provides. If all the ISP's charged what it costs to provide the
service with a decent profit margin and room to expand the pricing would
be much higher for this service.

> Any way you cut it, for them to levy this access charge is downright
> sabatage.

who is 'them' The LEC/RBOC's can't levy a charge, they don't make the
rates. The PUC can't levy a charge because we are not public utilities
and the FCC can't levy a charge because they can't do that at the state
level.

-Matt