Re: ISPs in trouble? (fwd)

Jason Hatch (zone@loomis.berkshire.net)
Wed, 13 Nov 1996 01:57:31 -0500 (EST)

On Tue, 12 Nov 1996, Matthew S. Crocker wrote:

> > 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.

Based on what I've read (I think in the magazine "tele.com") and If I
didn't mistake your previous post, the telcos are trying to SINGLE US OUT
because we are overloading their phone switches with people spending hours
and hours of time online. I think the magazine cited that in one city, the
average length per call more than doubled due to people calling ISPs.

> 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'm more worried about RBOC's being empowered to charge us for our analog
lines.

> 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.

Yes, but you recently lowered your prices which shook our faith terribly.
I was longing for the day that I could jack my unlimited access up to
$60.00 a month.

> > 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.
>
So how the heck do we make it such that we can charge a few bucks more to
make a little profit. I'm going to fume through the roof when half our
customers call us to quit because "AOL is 19.95"

:)

-Jason