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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."
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
Yes, ISP's are becoming like long-distance service. People (most people who aren't complete computer geeks) could care less how long they wait for tech support, how fast their connection trains up, or anything like that, as long as it's cheap.
The truth is, the differenct between ISP's ~really~ isn't that big (not for the major ones, at least) So if someone can get their internet for $1 cheaper at the next company down the road, they usually will.
Unfortunately, this creates a problem, because now companies are competing for customers by price, rather than quality of service. It's a harsh reality, but to quote Radiohead "you do it to yourself, you do. And that's what really hurts..."
We can't have it both ways, and it seems that people who know what they're doing are a minority. Meaning that the trend is going to continue, because the average person only cares that ~their~ internet only costs $7/mo. and really, how much of a network can you build w/ a customer base paying $7/mo?
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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.