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On The Future of ISPs, Both Large and Small...
DwnaboutDSL asks: "I work for an unamed ISP, its decent size but still basically a local company. Months ago, we were bought out by a company which is nationwide, with some international ties as well. I can't mention either company by name due to confidentiality, however, what was said is quite frankly disturbing at best. In a press release which is to be released sometime during the evening of April 5th, our parent company is going to be dropping the axe on roughly 2000 employees. Nationally, we only have 4300 or so, so this means that 1 out of every 2 employees will be looking for a new job. This all due to the market, and funding. One of the main funding sources for our company is Lucent. Which is a fairly huge operation, and is even more disturbing to hear that they seem to be going under as well." Given the recent bad news in the DSL market, is it likely that the market slowdown will create delays in broadband Internet services offered to home users, and how will the ISP market look after all of the economic turbulence has ceased?
"My main concern, and question seems to be what is going on. Yesterday there was a story about DSL companies (large and small) being hit, and hit hard. Going under with little to no notice. Now our parent company, and even we are being hit as well. We do offer DSL, and its through Covad, which was said to be dying off in yesterdays article. Though, even still, that isnt the cause.
I guess another main concern as well, is where is this going to end? What has happened in the Internet industry to cause such a decline in not only sales, but in jobs as well?
We got lucky, no one at our ISP is going to be cut, not now anyway. There's still a chance a couple weeks from now perhaps, but we were spared from this, but many...too many, were not."
Are there any options to avoid this kind of delay, either through using a different plan at Easystreet or through using a different ISP in Portland?
Alex Bischoff
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Alex Bischoff
HTML/CSS coder for hire
So, with Easystreet, which of their many individual pricing plans or enthusiast pricing plans do you use? And, were you able to choose between the Verizon and Qwest options there, or was that determined by your location? Also, it's not PPPoE (PPP over Ethernet), right I've heard bad thing about PPPoE -- primarily its significant "spin up" time.. As I'm thinking about moving to the Portland area, so this is of quite an interest to me.
Alex Bischoff
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Alex Bischoff
HTML/CSS coder for hire
Support for my argument can be found in this ZDNet article
"But remember, most lynch mobs aren't this nice." (H.Simpson)
-- Joe
> The biggest problems are late payers and line hogs. We solved this problems with a little program that would look to see if
> the modems were filling up and/or if people had multiple connections who weren't supposed to. If the modems did fill up,
> it'd clear connections by bumping off people who owed us more than 2.5 months [which was basically to rule out
> prorated amounts + setup fee]. If it didn't get enough from that, it would bump off people who had been on more than 6hrs
> straight.
>
> We'd have people calling us at 7pm, begging us come down to the office to drop off their payment as they just got
> dumped 4 times in a row, only to check their mail to find the 'this wouldn't have happened if you paid your bill' message.
[F/X: this reader chuckling]
My long-term ISP, whom I've been with since late 1992, has always enforced a pay-in-advance policy. You forget to pay a bill, & he disables your account. One reason he can afford to keep in business. (The other is that he does all of his support via email -- that keeps the bottom 10% who waste 90% of his time away.)
If I ran an ISP, there would be no way in hell I'd let someone ride for free for two & ahalf months. Maybe a month if they positively swore each time they called the check was in the mail. Unfortunately, I know of at least one ISP who took a year to close accounts. (I know this because I was given use of this account until the ISP closed it -- & the original owner told them to close the account.)
The only reason people got away with this kind of crap was that ISPs were trying to build marketshare. Either that, or the owners truly were bad businessmen.
Geoff
I think I see a trend here. Maybe for them it really would be easier to muzzle the entire internet than to produce p
The big problem with DSL is that pesky middleman that has a vested interest in seeing you fail. If wireless can be made to work then they are out of the picture and we have a vialble alternative again.
Let's keep our fingers crossed that the product can live up to it's hype.
Davo -- Free speech, free software, AND free beer.
The ISP market is a very amusing one indeed. You've got dozens of companies in the same area offering the same service for the same price and sometimes all using the same dial-ups. Of course there's going to be a large shake out soon in the market. Only the companies offering the best services for the lowest price will survive. If you're an ISP that offers some personal web space and an email address you better take a look at the big boys like MSN and AOL. AOL customers get a pretty broad range of services for a decent price. They don't rely on Yahoo! or someone else to provide content for them like so many other ISPs do now. This is how a free market works. It sucks for the guy who has been overworked at some little ISP who's about to lose his job but thats how the cookie gets jumped on and obliterated.
I'm a loner Dottie, a Rebel.
The URL you gave for "port 25 blocking" was invalid, and a search of www.earthlink.net didn't turn up any references.
Caution: Now approaching the (technological) singularity.
I think we've pushed this "anyone can grow up to be president" thing too far.
It used to be that they could call us and we'd setup everything (including handling work with the telco),
That's how it still is, at least with my ISP. I've had Telocity for about a year now and I'm in Michigan, so my telco is Ameritech. Just recently a friend of mine signed through the same service and his installation went the same way.
I don't know about other areas of the country, and IANAL, but it does sound like you've got yourself a nice big lawsuit given enough money to fight them. IMHO, there is definitely some breaking of the antitrust laws here...big time.
My journal has hot
There's a catch to those low prices. It's called customer service, or specifically, lack thereof.
:)
As the former Baby Bells have gotten larger, customer service has gone down the toilet. Just ask *any* long-time Ameritech customer.
My journal has hot
By 'market' I assume you mean the stock market? (might be a dangerous assumption).
People are losing their jobs, not because the stock market is failing, or because their company is losing funding, but because *their company is not profitable, and hence, not sustainable*.
In fact, if this isn't someone I know, the story is even more scary, cause it means the same exact thing is happening to lots of once-traditional, once-local ISPs.
--
Terrorists can attack freedom, but only Congress can destroy it.
PPPoE works fine (if the DSL provider and ISP have their sh*t together). I use PPPoE through my home (non-split) PacBell phone line via Covad bridged to Earthlink under both Linux (roaring-penguin is in the Mandrake 7.2 release, as is ip-chains firewall) and OS/2 (using Injoy Firewall, which includes PPPoE support): free modem, $50/mo.
My PPPoE DSL is pretty reliable (and fast, over 1250 Mb/s down). The only delay is at the first connection - turn on the DSL modem, wait for it to sync, then it's up. (That's a common troubleshooting procedure, too.) After that, DSL is always-on, 7x24, never drops unless PacBell (rare), Covad (also rare), or Earthlink (sometimes) screws up. I think the longest my DSL line has been down was about a half day one time when Covad was mucking around (and I gave their technical support voice tapes some colorful manager listening material that time, you can bet).
I'm in SoCal, but grew up in Portland. Is broadband access really as grim there now as you seem to suggest?
"Example 2: If I call the phone company and order phone service, I'll have a service call the next day, but if I order DSL, it's going to take a few weeks. Yet a DSL installation is not any more complicated than a standard phone installation!"
Not true. DSL takes time for the telco to provision. They have to circuit-map your line from their CO to your location, check for A/D-D/A converters in the link (these kill DSL), check the transmission footage, perhaps test your line for impedance, bandwidth, noise/static, phase-jitter at DSL frequencies, etc., install CO band-pass filtering on your line, allocate a DSL header, and document all this both internally and to your DSL provider. No wonder it takes a few weeks from ordering to get the provisioning done.
Any extra delays for third-party DSL providers are likely due to internal review, tariff checking, stamping regulatory forms, mailing time, and the DSL provider's own delays in handling telco provisioning paperwork.
Beats me as to who got gobbled up, but I'll bet dollars to donuts that the buyer was EarthLink. They have bought ISPs by the dozen ever since the merger with MindSpring. Look at the number of ISPs they have now, under their banner..
Sprynet
Netcom
Sprint
OneMain
JPS
You can add Primenet (the dialup part of Global Crossing/Frontiernet/Globalcenter) which announced that they were handing over their customers to UrkStink last month.
Interestingly enough, an informal poll suggests that a sizable portion of the customer base hasn't received any notice at all; this may account for less than 100% fleeing ahead of the disaster.
Lacking <sarcasm> tags,
I still own stock in a 'small' ISP [under 600 lines, DSL and dedicated service... I think they were at 46 lines when I started working there full time]. ISPs can be made profitable, but it definately takes some work.
The biggest problems are late payers and line hogs. We solved this problems with a little program that would look to see if the modems were filling up and/or if people had multiple connections who weren't supposed to. If the modems did fill up, it'd clear connections by bumping off people who owed us more than 2.5 months [which was basically to rule out prorated amounts + setup fee]. If it didn't get enough from that, it would bump off people who had been on more than 6hrs straight.
We'd have people calling us at 7pm, begging us come down to the office to drop off their payment as they just got dumped 4 times in a row, only to check their mail to find the 'this wouldn't have happened if you paid your bill' message.
As for CLECs, they're hurting because of the ruling that the ILECs don't have to pay thm reciprocal charges for termination to ISPs, because the internet qualifies as long distance. So the ISPs can't get the dirt cheap PRIs anymore. [But well, like anything, that's gross generalization, as prices fluctuate wildly by market]
The problem with most of the ISPs is that the people running them may have had good technical sense, but didn't have the business sense. Sure, you could get a loan and buy lots of equiptment, but how quickly can you get a return on the investment? You can have great sales, and undercut everyone's prices, but again, you have ROI issues. Your best bet is to stay small, cater to the users, make sure that your service is better than everyone else's in the area, and just wait for word of mouth. Your first users will be people who were kicked off of their other ISPs for being line hogs, etc, but with some incentives [refer us to (x) friends, get a month free!] you can get them to pull in their friends.
It also rather helped us that we had USR racks, and so we didn't suffer from the 2 version of kFlex issues before v.90 was finalized, and all of our competitors were either running older modems [AOL] or Lucent/Rockwell modems. We also had enough outgoing bandwidth to handle a full PRI while some of the others were running a channelized T1 through a 56k frame circuit.
If you play your cards right, and have good service, you can hit the point where people may leave you, but when they're done with the mandtory 3-6 months they had to sign with with the other guys, they're begging you to take 'em back.
Build it, and they will come^Hplain.
to plug the company I work for...
ispmenu.com allows you to search and compare DSL and dialup providers available at your address. If your ISP is going down you can find a new one, at least until all of the ISP's have been gobbled up and Earthlink and Verizon merge or something.
See here for numerous examples of this.
Last night I shot an elephant in my pajamas. How he got in my pajamas I'll never know.
My post below seems to echo your experience; I'm also in Portland, and used Teleport (*sob*) until recently. Who's your ISP now? Why do you like them? I've signed up with Hevanet, who are still small enough for real people to make customer-satisfaction decisions. They seem good in other respects too, but time will tell...
question: is control controlled by its need to control?
answer: yes
This isn't as much "normalization" as it is "don't take so many drugs when you're designing tables."
This is the point of my previous post: the more things are automated (and at a national ISP, as much as possible is automated), the fewer people are needed to produce the same service. Also, the remaining people need more and deeper skills to manage the more complicated machines that replaced their ex-co-workers.
The future belongs to those who can tell machines how to manipulate data, or other machines, or people. Pretty soon everyone else will be flipping burgers.
question: is control controlled by its need to control?
answer: yes
This isn't as much "normalization" as it is "don't take so many drugs when you're designing tables."
...for fscked company.
Make sure you add it! It's about the only really accurate record of the collapse of the IT industry.
It looks like I'll be adding an entry myself in October...we're getting cutback from 30+ employees to 6.
I'm "guaranteed" a slot, but I have to say that our little corner of the IT world has been GROSSLY MISMANAGED.
if the truth ever comes out, this collapse has everything to do with COPORATE WELFARE SCAMS and nothing to do with the talented people at the bottom.
Treatment, not tyranny. End the drug war and free our American POWs.
See my user info for links.
No more calling up and talking to the owner
You just reminded me of something, circa late 1995 or early 1996. This was when Erols (now a subsidiary of RCN) still had that local ISP flavor.
One night I had trouble with the news server. It wouldn't let me in. I had heard that CAIS provided the servers. Just for the heck of it, I sent e-mail to root@cais.com. I got an answer. One of their sysadmins politely informed me that Erols had just set up their own news servers. CAIS had locked out non-CAIS customers after that. Erol's hadn't told us, but I just took that in stride. After all, this was the internet. It wasn't like I needed it.
Not long after that, I actually worked at Erol's, starting out in tech support. One of the groups of people we used to make fun of were daytraders who called us up screaming in our ears telling us "MY BUSINESS DEPENDS ON THE INTERNET!!!". The very idea of any business depending on the internet was ludicrous. Assuming it was true, they were foolish not to have a backup provider.
After a while I got used to that idea. So did a lot of people. The entire economy has, in a very real sense, behaved just like that idiot daytrader. But, but, but... technology companies can't go down. "THE ECONOMY DEPENDS ON THE INTERNET".
Well, guess what folks. The internet is just as flaky today as it was in 1995. Worse yet, there doesn't appear to be any "backup provider" for the kind of sizzling hot growth that the internet spurred throughout the 90s.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
Quite frankly, I've always had the impression that the telephone companies would rather DSL hadn't come along at all. They would quite prefer that consumers would go back to 56k modems and businesses would invest in safe sensible (and expensive) T-1's. The service is offered to stall the growth of cable modems, which they see as a potential competitor for phone service. They don't like it though, as they have been forced to open up their lines to competing companies, which cable providers have not. As a result, they do very little marketing of the service and devote minimal operational support. It's a deliberate effort to scuttle the technology.
Example 1: Every phone bill I recieve has an invitation to order a bevy of calling services, such as call forwarding, and voice mail. Yet the only invitations I recieve for DSL service are from service providers themselves (Even though the phone ocmpany does offer DSL service directly.)
Example 2: If I call the phone company and order phone service, I'll have a service call the next day, but if I order DSL, it's going to take a few weeks. Yet a DSL installation is not any more complicated than a standard phone installation! They just don't care to devote any resources to it, since they don't own the whole pie.
Ok, final point, is there a solution? I believe the answer is in new forms of competition. In California, for instance, my home state, I believe the state could crack open the market by buying the powerlines from the utilities and opening them up to private firms wishing to provide high speed internet access. Solutions will vary state to state, but ultimately competition is the answer. Without competition, the telcos will be content to strangle their competitors out of the business, with just enough foot in the door to hold the cable companies at bay.
"Don't you know you're going to shock the monkey?"- Peter Gabriel
There's nothing happening in the ISP industry that has not happened 1,000 times before: its the normal ecology of business. New sector opens up; barriers to entry are low; multiple entrepreneurs pitch in; boom of some size, followed by end of boom, culling of unfit companies, and major scale vertical and horizontal mergers. Think: tulips, East India trading; motor industry; yo-yos, hula-hoops, skateboards.
Beats me as to who got gobbled up, but I'll bet dollars to donuts that the buyer was EarthLink. They have bought ISPs by the dozen ever since the merger with MindSpring. Look at the number of ISPs they have now, under their banner..
Sprynet
Netcom
Sprint
OneMain
JPS
This is just a very small sample... EarthLink owns, last I checked, somewhere around 20 different ISPs... And they just keep eating.
When encryption is outlawed, ?o'AZ-,++o+i++##4AoA+-/-C++bI+/.+~
The last big PC bust happened in the late 80s. Similar to today, new applications drove a huge number of purchases between 1980 and 1988, but by the end of that period the old standbys of word processors and spreadsheets faced a pretty saturated market, and no amount of sexy new hardware could change that. Compaines like IBM were still selling 8086 machines in 1990 that were no more powerful than original PC, while their pricey Microchannel equipment gathered dust in the stockroom.
As a result lots of former big names sunk off of the radar. Others, like Apple, went extremely high end to chase profits.
The only thing that ended this downward spiral, was Windows 3, I hate to admit. While being totally crappy to it's core, it offered significant productivity increases (meaning, companies could fire a bunch of secretaries and force middle managers to type their own memos), assuming you had the fairly decent hardware it took to run it. Those late era 8086 machines were obsolete within a year. In the quest to get all of this shit working decently, we found ourselves in our current "3 Year Upgrade" cycle. As Internet applications came about, the rip-n-replace cycle only accellerated.
But, now it's been done. Nobody has any reasonable desktop apps which would convince widescale upgrades. All of the good ideas out of silicon valley lately are bandwidth-limited, and that's a fundemental problem that can't be solved by smart hardware/software people. Add in the big players (telcos, cablecos, big ISPs), and it will probably be a long time until we see the next big boom in the computing market.
TSIA
Brackets contain world's first nanosig, highly magnified:[.]
Everyone wants fast, cheap internet. However, the bigger you get,the larger your support staff(tech support, admins, field techs for cable/dsl providers, etc). And high speed data networks cost more than regular dial-ups anyways. That means more money needed. It's a vicious cycle.
-Henry
"Useless organic meatbag" -HK-47
Worked fine for me.
http://help.earthlink.net/port25/
--
The occasional poster formerly known as jihad23
I like my women like my coffee... pale and bitter.
Then came broadband. DSL first, and it didn't look too awful. The local CLEC (Covad/Northpoint) would sell you a T1 to mux your customers on. You wouldn't make too terribly much margin but it was a little extra dough so whatever. But then the installs ... the two guys you hired to answer the phone ended up spending half their day on the phone with your CLEC. You noticed your support starts to slip and your customers are bleating for broadband, the same service which is starting to drag you down.
Then the big trouble starts. The CLECs decide T1s aren't worth their weight in gold so they force you to buy a T3. That's big time $$$ monthly compared to what you're used to so you try to hold the fort with the T1 you've got. Fortunately you're under contract so they leave you alone. As for business ... sure, some dial customers are happy where they're at and/or can't get DSL at their houses so you try to focus on them. But broadband is catching on and the Free ISPs are starting to pop up. You're down a $k or two in monthly revenue.
Now the LECs are in the DSL business. A T1 or T3 to them to resell DSL? Forget it ... you can only make $10 margin on an ADSL customer because the LEC is price gouging the industry looking to kill the CLECs and, therefore, you. So you cling to the CLEC and the T1 you started with but the contract's done now and they're tired of your righteous yelling ... you don't offer DSL anymore. Your customers are leaving dial in droves, the two guys who used to answer your phones have graduated and that ole dual Pentium Pro that runs your services needs upgrading. With all this beating on your mind, on the first sunny weekend in the spring, you spend your weekend piecing your webserver back from backups because a bunch of 13 year old IRC geeks have taken you down with the latest Trojan that you were a bit too slow to implement. You turn the lights off and decide to get a real job.
And then the telcos can acquire the DSL services (that are already partly theirs anyways and they have all the technical know-how to manage, even if not the customer support), AND (more importantly) a set of customers already...
When they consolidate 2 or 3 different DSLs using their own service, they become a DSL powerhouse with an income stream that's unstoppable...allowing them to increase the pressure on the remaining DSL types still "leasing" their services until they too are ripe for acquisition...
bastards...
"But remember, most lynch mobs aren't this nice." (H.Simpson)
-- Joe
"What has happened in the Internet industry to cause such a decline in not only sales, but in jobs as well?" Consolidation has happened, and it's going to keep happening. DSL and cable are putting mom-and-pop ISPs out of business left and right. For every cable sign-up, one person leave LocalISP Inc. forever. Each DSL signup makes it harder to run a cheap 56k modem-based operation. "...where is this going to end?" When there are a handful of huge national ISPs and a bunch of local, hacker-friendly "boutique" ISPs.
:)
It's ironic that, as promised 50 years and more ago, machines and computers really are labor-saving devices, just not in the way we hoped. Machines don't save you from doing more labor, but they save your company from paying for more labor. As more dataflow gets automated, and as hardware and software get easier to use, less human intervention and ingenuity is required to keep things running (less in aggregate, I mean, not in depth).
The ISP apocolypse is similar to what has happened in nearly every other industry: start off with thousands of little operations which compete fiercly for customers and market share. Eventually only a few will be left. After a while the service stops being differentiated from company to company and they compete on price. Once that happens, the company with the best economics - the most efficient - wins.
Look at Earthlink; their slogan is, "We're 10% better than AOL." For most people that's enough. Sure, people reading this comment probably want shell access on a *nix box for their $20/month, but Joe Sixpack just wants something that's easy to use (i.e. limited in options and functionality so it doesn't confuse him).
Yes, it's very sad that so many good ISPs are going away. My personal favorite, Teleport, was based in Portland, Oregon for years. They were reliable, responsive, and hacker-friendly. The got bigger, got inhaled by OneMain which was promptly inhaled by Earthlink. My service went from "shell access to pine" to "pray that 50% of my mail makes it through" in less than a month. And now I'm stuck with Earthlink's port 25 blocking.
I just signed up with another local ISP. Hopefully they won't be bought too soon.
question: is control controlled by its need to control?
answer: yes
This isn't as much "normalization" as it is "don't take so many drugs when you're designing tables."
I'm afraid I don't see much hope for the good old days when there were two dozen ISPs available here in the Portland, Oregon area. Instead, the ISP market will be mostly the impersonal national companies.
:) Hopefully they can hold off the soulless acquisition advance for a few years.
It's already blindingly obvious that the cable modem market in the US will never allow a local ISP a share of the market, which is one reason I prefer DSL: I can get my service from a local ISP. Sure, the line still comes from Verizon, but it's better than nothing.
But the DSL market is going the way of the cable modem market. Companies like Earthlink, the ISP-eating monster, are rapidly buying up the small town ISP as they find themselves unable to compete with the budget of national companies, regardless of the quality of service.
So, that's my bleak outlook on things. Last year, there were no less than 7 ISPs in my area offering DSL service. Since then, two have gone out of business, two have been purchased by national companies, and a couple others are fledging. One remains in high standing, and that's the one I'm with.
Back in 1996, when I worked for an ISP, the vast majority of them here in Portland were running at a loss, with the resulting problems (late paychecks, making due with obsolete or underspecced equipement, etc.). But the owners held in there, betting on the day that they became ``big enough" to either be profitable -- or could sell out to one of the nationals & get their own paycheck.
In short, unless one was running an ISP as a hobby, the present day of reckoning was bound to come.
Add to this the fact most competitive local exchange carriers (or CLECS) are likewise bleeding red ink -- & all of the telco suppliers like Lucent were depending on increasing their revenues by selling to these ISPs, CLECS & DSL providers (sometimes at give-away rates), & it's obvious that we haven't seen the bottom of the crash in this market.
My hope is that 10 years from now, we aren't right back to where we started circa 1980: one beauracratic corporation providing access to 80% of the US, & several equally unresponsive smaller ones servicing the remainder of the market.
Geoff
I think I see a trend here. Maybe for them it really would be easier to muzzle the entire internet than to produce p
I work for a regional ISP. Basically, the real problem with DSL is that the phone companies make it extremely difficult to sign up new customers. For our customers, they basically have to go through Bell to get their DSL line, telling them that they want service with us. When they get DSL installed, then we turn up our end. It used to be that they could call us and we'd setup everything (including handling work with the telco), but Bell did everything they could to make it difficult for us to do any work with them. Hence, we have the current situation. Along the way, when the customer calls, the phone company lets them know about special deals that their Internet provider has on getting DSL, and how much easier it is to sign up with them instead. You can get a free DSL modem and a discount on your service if you sign up through them. It smells very much like an abuse of a monopoly to me, but it's hard to put any pressure on them when they have the politicians in the palms of their money-filled hands.
Make no bones about it, the Telcos are not going to give up their hold on DSL without a fight.
On our side, we've basically shifted our focus. We still provide the best dialup service you can get, but we're targeting businesses now for Internet service. Most businesses need T1s, and with contracts, we don't have the same volatility. Unfortunately, most ISPs seem stuck on the on the dialup model, which was never a real big revenue generator anyway, what with AOL and the increase in cable modem usage.
Mom-n-pop ISPs are going to go under, unless Mom and Dad are smart business people, and realize that they need to get off the sinking ship that is dial-up and DSL and move onto more stable revenue generators (such as business broadband and outsourced services). Of course, it sucks for the residential consumer, because what's left are giant companies that can afford the low prices that consumers are demanding through mass equipment purchases and rollouts. Those companies also have stronger revenue streams coming in from other subsidiaries, to make up for any short-term losses generated by an almost saturated dial-up market.