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Crashing And Burning In The DSL World

Posted by ryuzaki0 on from the like-the-fru-its-of-the-de-vee-il dept.

Aarthek writes: "As I was doing my usually daily browse I came across this story from PCWorld. After my experiences with PhoenixDSL being transfered to Telocity, and Telocity not delivering the service. I've been wondering how much longer companys like Rhythms can stay 'in the game.'" The article has a brief postmortem on DSL providers who have already dissolved and paints no rosy picture for the survivors. Low margins, high barriers -- sounds like another case of DSL Woes.

15 of 117 comments (clear)

  1. My local ISP... by singularity · · Score: 5

    My local ISP, IgLou.com, has been battling BellSouth (our local Baby Bell) for several years over DSL access. It seems that the ISP (local to a few local major cities) is actually winning a few small battles.

    http://www.iglou.com/dsl/victory/ is their press release concerning their victory in courth, requiring that BellSouth provide DSL access to local ISPs for the same amout that it changes its largest cutomser, Bellsouth.net.

    I keep waiting for IgLou to offer DSL for reasonable rates.

    Slashdotters across the country should be informed of , with its inclusion of a bill by y Representative Billy Tauzin (R-LA) allowing BabyBells to prevent local ISPs from accessing their DSL lines.

    Perhaps I should have submitted this as a full story...

    --
    - (c) 2018 Hank Zimmerman
  2. Re:not all dsl was made alike by garcia · · Score: 5

    too bad that the weak providors (such as Verizon) are doing the best. They are probably doing better b/c they don't have to pay people to give good support and they oversell their bandwith to the point of being crazy.

    I am very disappointed with Verizon as a DSL providor. Their normal telephone services are fine and their tech support is also fine.. When you get to the DSL operations they lack in many areas:

    1. knowledge
    2. telling the truth
    3. customer first
    4. calling back
    5. caring that their service blows

    I have used DSL under epix.net in PA and have never had a problem. They are very helpful (even w/Linux and in fact have some Linux gurus on staff that are willing to help).

    When you call in for customer service I don't expect to wait on hold for 2 hours (until the portable phone dies), I don't expect to hear "yes, we know, there is nothing planned to fix that in the near future", I don't want to hear lies "oh, no technician would have told you that", and I don't want to hear excuses. I want the service that I am paying for.

    It is a sad state of affairs that in a capitalist economy the best isn't winning...

  3. It's profitability, stupid by DeadFish · · Score: 5

    His beef is with DSL providers that he says care more about their bottom line than they do about customers.

    Y'know, if these companies were actually paying attention to the bottom line, they might not have built out their network too wide and thin to possibly be profitable, and wouldn't be having these problems now. If anything, they weren't paying *enough* attention to the bottom line before it bit them.

    As for blaming the baby bells and such, they didn't make northpoint, covad and rhythms deploy stupidly. It's not the fault of the baby bells that their numbers didn't add up. Northpoint in particular was not only poorly planned, but wildly incompetent during their best days. While the major telcos might have concievably hastened its demise, they didn't make northpoint STUPID, northpoint did that on its own. I don't blame Verizon for not wanting to buy them out after taking a look at them.

    The blame also would have to go on the shoulders of bone-headed investors. Laying out a wide-scale network like this would never be profitable in anything under six years at best. After it's all built out and the market rises to fill it, then yes it could concievably be profitable, but not before then. Anyone investing in such a venture should have bothered to make themselves aware of this.

    Personally, I've got some lovely DSL which is currently doing fine, and not going anywhere. I get it from a local facilities-based ISP that only builds out COs if they believe the COs to be profitable. So while it's not as wide as the coverage offered by northpoint, rhythms, covad and the like, it's at least a sane business model for stability.

    --
    Another damned comic
    +++ NO CARRIER
  4. Why small ISPs don't make it by cobar · · Score: 5

    I work as a sysadmin for a small isp in SoCal and one thing that's makes it really hard for us to get by is some of the ways in which GTE/Verizon and PacBell try and squeeze out the little guys.

    For example, Verizon is dictated by law that they must charge $32.50 for the DSL line (not including ISP service). That was fine when they charged a total of $49.50 for a complete package. But in order to remove competitors, they have lowered their prices to $39.99, causing their ISP division to take a loss presumably, while they pay for it with profits from the telephone division. This makes quite hard for ISPs using Verizon to supply the physical link to make it on such a small margin.

    PacBell used these tactics as well and has virtually eliminated all the competition in their areas. They set their price at $39.95 and once they had most of the market, they raised it back to $49.95. This only works when they have large cash reserves or can abuse their relationship with the telco to fund price cutting with the DSL line profits

    Traditionally, Verizon offered free modems to all customers who signed up for a 1 year contract with any ISP. They've since stopped that offer as well and made it so that only their customers get the modem, while ours must pay $200. Gee, which company will the customers sign up with.

    This sort of crap makes it really hard to make a profit or even stay in business. We've managed to stay alive, but a lot of other ISPs in our area have gone under. From what I've heard Verizon doesn't have particularly good service, they just win through anti-competive behavior and ISPs can't afford to sue and don't have the market share to make them compromise. Definitely bad for the consumer and us as well. Hopefully, Verizon will decide they have enough of the market and raise their prices back, allowing us to make a bit more money.

  5. not all dsl was made alike by The-Pheon · · Score: 5
    I recently (last week) was hit by the dsl bomb as well. Our company had a 1.2 sdsl from @link (atlinknetworks) which stopped working last wednesday as can be seen on fuckedcompany. Luckily with the help of nortel service was restored at least until May 31.

    Unlike the woes i have heard from many other dsl users, @link actually had an incredible amount of reliability (one 15 minute outage in 2 years!) and great tech support. It is sad to see even the good providers crash and burn before they can get off the ground.

    1. Re:not all dsl was made alike by d0d63 · · Score: 5

      I used to get 24x7 ISDN service from Bell Atlantic which cost about $275 per month. After my CAIS/Covad DSL line came up (97 days late because BA failed to configure the first switch from the CO to my house correctly) I killed the ISDN line. The next month the bill arrived and since I'd cancelled service on the billing date I paid it. The month after, I got another bill and called to complain; they said "ignore it", so I did.

      The month after that I got another bill which included late payment fees for the preceeding month. I called to complain; they said "ignore it", so I did.

      The month after that I got another bill which included late payment fees for the preceeding months. I called to complain; they said "ignore it", so I sent a letter to the President of Bell Atlantic asking what the hell was going on. I got no response.

      The month after that I got another bill which included late payment fees for the preceeding months. I called to complain; they said "ignore it". I bitched without success, escalated the call to the highest level I could to no avail other than "ignore it". So I wrote a letter to the State Corporation Commission explaining that I felt I was being singled out for bad service (remember 97 day delay plus dumbass charges) because I was going with another provider.

      Within three days some suckup from BA was on the phone to me apologizing out her ass.

      The point here is this: Complain to the bureaucrats. That's what they're there for. These PITA .gov employees don't have to work only against you, they can also work against those who are screwing with you. Use them.

  6. yowza by legLess · · Score: 5
    Ok, I even call myself a bleeding-heart liberal, but I try not to be a fool. Like this schmuck. From the story:
    "DSL providers, the NorthPoints, the Covads, the Rhythms, they don't care about the customer. All they care about is the numbers on Wall Street," Nathans said.
    Does the word "duh" mean anything to you? Welcome to capitalism, Mr. Nathans. Tomorrow, the shocking true story of corporate executives exploiting their workers to get filthy rich!

    All sarcasm aside, there are some people laughing all the way to the bank here: the Baby Bells, the "last-mile" providers. In Portland it's QWest, and they don't exactly make it easy for little ISPs to sign up DSL customers. Especially since they have their own competing service, and a guaranteed revenue stream from existing customers to prop up any DSL losses.

    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."
  7. The dot com bust spread to hardware by dfenstrate · · Score: 5

    This is just an extension of the idiocy seen in the dot-com 'new economy' spread to consumer services. They didn't know how to run a business, and didn't give a thought to figuring out how fast they could become profitable. Anyhow, their folly will be a boon to the companies that buy their equipment at dirt cheap prices (like AT&T), because you'll have blue chip companies that can not only take a loss, but know how to turn a profit, providing DSL service. Don't discount DSL just yet. Just think of these failed companies as the telecom version of pets.com.

    --
    Alcohol, Tobacco and Firearms should be the name of a store, not a government agency.
    1. Re:The dot com bust spread to hardware by Guppy06 · · Score: 5
      "They didn't know how to run a business, and didn't give a thought to figuring out how fast they could become profitable."

      That may be part of the problem, but it wouldn't be quite as bad if they weren't dependent upon their competitors for part of their infrastructure. That right there is asking for trouble.

      "companies that buy their equipment at dirt cheap prices (like AT&T)"

      If my experiences with AT&T's WorldNet is indicative of what AT&T is doing with that cheap hardware, they aren't even getting what they paid for.

      "chip companies that can not only take a loss, but know how to turn a profit"

      Blue chips and other big names can make dumb business mistakes as easily as newcomers. AT&T originally scoffed at the internet. IBM let a third party write its operating system. Xerox let GUI and ethernet walk out the door. It all depends on who's in charge at that particular moment.

  8. Broadband by spoocr · · Score: 5
    Seems like these DSL providers going out of business may be one of the forces driving the popularity of cable. People get hooked on broadband, then eventually switch to cable, as cable is typically run by companies that aren't going out of business soon, and there's no way that someone who's used broadband is going back to dialup.

    I'm on Cox@Home, and while their customer service has a tendancy towards suckage, and we get a few hour outage every 4 months or so due to "hub upgrades", it's reliable and fast the rest of the time. I've looked into DSL, but there's really few reasons to switch at this point, seeing as we can be at least relatively sure of the cable service always being there. DSL may be faster during peak times or in neighborhoods where there's a large amount of cable users, but it's not as solid from a business standpoint.

    Maybe if a few big companies (Like a Baby Bell?) were providing access, people'd be more inclined towards it.

    -- Chris

    --

    -- Chris
    $email=~s/[^a-zA-Z0-9@.]//g;

  9. Ah come on guys... by litheum · · Score: 5

    ...just go to college, live in the dorm, and you don't have to worry about it anymore! I get ethernet, cable, telephone, utilities, maid, Lake Washington, the Cascades, Mt. Rainier, and *food* for less than you cheeses pay to live in a box for a month.

    I'm planning on staying in college for a while... there are a bunch of professional degrees, right? Collect 'em all!

  10. Definitely a problem by JediTrainer · · Score: 5

    Probably one of the biggest issues with DSL is that these companies can't establish their *own* networks. Instead, they have to rely on the bigger telcos to provide the connectivity, and of course that brings all kinds of charges plus the traditional waiting game.

    At least that's the issue in Canada right now. There's a few DSL providers out there, but really Sympatico is just about the only viable one. Why? Because Bell Canada owns the network, and they own Sympatico. Other providers have to pay Bell fees to use the phone lines, to get everything set up, and finally they have to wait because Bell is the only company that can service the line if something goes wrong.

    Looks like the cards are stacked. Margins are low because they have to compete with Sympatico, who uses the network already in place. Installation can take months because Bell puts priority on their customers over another provider's.

    Personally, I'm using Cable (via Rogers@Home, though my usership was recently purchased from Shaw through a geographic trade in service areas). Even a bigger monopoly in this case - there is only one choice.

    The third option, Look (I think they operate by Microwave or something, it's wireless) unfortunately isn't accepting any new customers until they sort their financial problems out.

    --

    You can accomplish anything you set your mind to. The impossible just takes a little longer.
    1. Re:Definitely a problem by NutscrapeSucks · · Score: 5

      Well, from the telco perspective, they invented a technology (DSL) that allows them to make additional profit from copper networks that *they* built at great expense over the last 80 years. The fact that 3rd parties can get a cut off this network is more of a regulatory miricle than anything else.

      If it was easy to build-out the last mile, more people would be doing it. As it is, the cable industry almost bankrupted itself doing so (saved by Internet hype and deep-pockets such as AT&T and AOL/TW). Even as duopoly providers, the phone/cable companies usally with a tacit agreement not to eat each others lunch (despite what they told congress before the 1996 telcom act).

      Now, if you had massive amounts of capital, would you spend it laying last-mile connections, or would you buy a slice of wireless spectrum and try to accomplish the same thing at much lower build-out costs?

      --
      Whenever I hear the word 'Innovation', I reach for my pistol.
  11. Re:It's the Baby Bells stupid by Guppy06 · · Score: 5
    Yes, I know I'm responding to a troll.

    "For all I care Texas should secede already and make their own country."

    IIRC, they tried that twice already. The first time was from Mexico in the 1840's (they succeeded), and the second was from the US in the 1860's (they failed).

    "I imagine it will be an ARIAN nation of sorts"

    That would be interesting to see, considering the way their former governor has a latina for a wife.

    "and maybe we could even get rid of the asshole Bush that way too, as a bonus."

    Oh, come now. It's also been the home of great Democrat presidents as well, like Johnson.

  12. Some good, some bad by glenebob · · Score: 5

    DSL is a pain in the ass sometimes. It's a *real* pain in the ass when you live 4000 Ft too far from the home office to get it, and you have to pay twice as much for less than half the bandwidth by getting ISDN. Grrrrrr.

    But back in January I moved and woohoo I got very close to the home office. Verizon is now providing me with cheap and very reliable 768/128K DSL. It was installed on time and everything has been peachy.

    But, now I'm moving again. Just a few blocks. So I'm having my account moved to a different address and phone #, same modem, same ISP, etc. Simple. This time, however, I've been screwed. I got an original due-date for activation on 04/26. 04/27 rolled around and I called to verify the activation had been done. Turns out the 04/26 date was bogus, and they claim to have no way to find out who did the order. Now the due date is 05/15. The shutdown date for this (old) location is 05/01. That's a 10 *working* day down-time, and they claim that's the best they can do!! Ever!!!

    So, until 05/15, I need to use a POTS modem. *sigh* So I call to have a second analog line installed. Guess what... Due date is 05/03. Huh? DSL doesn't require a tech to come to my house, the analog line does. Why the hell does it take so long to activate the DSL line?

    I love the bang-for-the-buck factor of DSL, but why the hell does practically every other aspect of it have to blow chunks? It seems that the phone companies don't *really* want to provide it, because it's so cheap. So why the hell don't they just charge a little more and provide decent service?? I'd gladly pay a bit more for it, if I could avoid all the problems. That would also provide a bit more cash for R&D, so maybe they could finally extend the truely pathetic distance restrictions.

    Yep... DSL is great, until you find out your one of the majority who can't get it, or get screwed by phone company incompetence, or both.
    --
    Damn it Jim, that's my sphincter, not a jelly donut!!!