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On Starting a Successful ISP?
Tigris666 asks: "I would like some handy hints from all /.'ers on what is needed in order to start up an ISP. I'm asking you guys in hope that someone out there has started one before, and i think that's a fair assumption. There are obvious things like mail/web servers, dial-in modems/systems, tech-support employees. But what i'm looking for is an idea on costs (we're talking Australia here), hardware required, and basically an idea on how hard it might be? Things like setting up the internet link, organising the phone lines to be put in, how many servers are needed, and the big thing! Is it all worth it? Does it pay off in the long run?" With larger fish finally jumping into the waters of Internet connectivity, is there still room for smaller companies? I would think that any new ISP would not be able to survive by solely providing dial-up service, and would need to look into the possibility of providing DSL or cable connectivity. However, providing broadband connectivity is a significant and expensive venture, made even more difficult considering the current economic conditions. What suggestions do you have for anyone who thinks themselves up to it?
"Basically the idea came up because the area I am from is in the country. There is only 1 service provider out there, and they are really bad with disconenctions, among other things, and everyone i know absolutely hates them. I think starting an ISP would be a good oppurtunity. I have recently moved to the city to get a real job, however I much prefer living in the country, so this will certainly be a big step."
Since you said you were in Austrialia with only one ISP provider, I assume that you are where the US was roughly 5 years ago. This assumes that most people do NOT have cable service and the phone companies aren't likely to have DSL for at least 3 years.
If these statements are true, then becoming an ISP may be a viable option. The key cost is that of the point-of-presence. Check around with Sprint/MCI and check the costs of a T1 or T3 line with access to the internet. Costs for a T1 (back when I checked it out) were roughly $1000 per month. (Phone lines are much cheaper - $20-$30 per month). I strongly recommend basing the location of your servers on the location your T1.
As for the back end servers, there are commerical grade routers available that connects directly from T1 to modem.
You also need to invest in good facilities. A raised-floor data center is a must, and leave lots of room for growth. Many data-wrangling companies (like ISPs) wind up having to move to different facilities just because there isn't enough room for their gear.
Since you are going to be paying top dollar for bandwidth, it is probably a good idea to get into the web hosting business. Also, look into providing colocation services; as long as you don't let it get out of hand, it's practically free money.
The biggest ISP is Telstra BigPond (for home customers) with the rest being smallish ISP's. There are a good dozen or so 'National' providers, but historically their tech support and quality of delivery blow.
Where I live (Tasmania) there are stacks of small ISP's, who all seem to be good for a year or so, then they suck, as they don't seem to expand much on their initial infrastructure.
For god's sake, if you DO start an ISP... Upgrade your bandwidth BEFORE people start to walk away!
- Dialup access
- some static higher speed
- Web hosting
- mail/news/application/e-commerce
am I correct or miss anything? So basically hardware wide you need a fat enough pipe to a major ISP either T1 or frame relay. I would suggest looking for a major provider that will start you out at 128k nilling increments based on your usage, nothing sucks more than paying for a T1 and only using half of it. Now lines in, youll need a bank of 56k modems, i liked USRobotics but there are much cheaper now if you can score good quality ones, then get something like a digiboard or Specialix bod or if you ARE incorporating some higher speed lines go for a Ascend box that can handle it, or course these are just some of the brands i'm familiar with, you can choose what fits your budget.then you're going to need a very basic router... mmm Cisco 2501 can be had cheaply and will do the job, but again just design a network that fits your budget. If you don't know how to design a network, time to hire someone that does, or maybe think out of this whole ISP thing right now.
a few simple (insert distro) linux servers or BSDi running on some low end P2 or P3 machines will do you good. get one with a BIG harddrive for news and get one for mail and a webserver and get one for misc things like the e-commerce or any misc small databases that you may support. Oh and dont forget to 10 or 20gig tape backup system that backs up your data incrementally every night and does full ones on mondaynight. I know that seems obvious but noone mentioned it yet and well, I can attest to at leat 15% of my effort was spent in restoring backups.
you won't make squat on dial-up access, once competition evolves youll be forced to go unlimited time and sure enough 50% of your banks will be filled with kids who hang on 24/7 to their connection. The big(sic) margin is in webspace and charging for a webspace's bandwidth usage. Make sure you purchase a very good usage meter(software package) so you can tell when and who is using all your bandwidth..because for sure your upstream ISP is watching you and charging you for your usage.
hope that helps and good luck, I started an ISP in Texas from the ground up in 94', built it up all by myself for a year and then left because the profit was pathetic and the stress was too high. You have to love it and give it your all because if not it will fail, every startup ISP I've known had zealots who founded it, and those are still going strong even today, others who were run by people halfheartedly who were expecting big profits have all gone under by now. Tank
It's interesting that you have no grasp of English grammar but know how to spell "bankruptcy". Sounds like you have experience in that area.
I published this a few years ago for Unixworld. You will want to use the PAM (RH5) configuration.
A single Pentium 150 handled 32 lines with no problem.
http://rhadmin.org/uw/015.htmlForget the technical aspects. You can deal with them. I know of ISPs that have made NT work (years ago, 4.0 with no service packs) good enough to be considered the most reliable ISP in town.
Marketing is where it is all at. If people don't know you are there, they won't sign up.
Switching ISPs isn't easy, if the other one is good enough they will stay. I can handle a few discounnects, much easier then I can handle all the people who know my email address. So you are mostly selling to those who don't have a isp. Better service will help them decide to take you. Don't count on switching anyone unless they piss their customers off.
If you are a cut rate ISP, you don't need redundant servers. Just install openBSD on a pc, with apache, sendmail, and a radius server and you are ready to go for the first month. (Virtual ISPs are good in the US but not for where you are)
In some respects it is easier to sell a over priced ISP with servce and reliabilty, but you need redunant servers and the ability to keep things up. When I called UUnet about a T1 line they told me that as part of their price (twice the other quotes!) they qould gaurentiee the line stays up, even if it is someone else's fault they take the hit (don't charge, and fix it).
But you need to start with marketing. Who are your customers, where do they live, how much do they make, what kind of computer do they have... Figgure that out, and then figgure what they can afford to pay for. Then figgure out how you will tell them about your service.
Worry more about which newspaper adds you take out. You should spend more time doing interviews for the local paper(s), radio, and TV. If they don't know you are there they will not come. For every dollar of technical you spend do two marketing. For every minute of technical work do two marketing.
don't plan on making money for the first year. That means you live off of your day job, wife, or savings.
160 cusomters is a good number. Out of that you need to pay for two t1s (one for data, one for dial up), and make payments on your servers and the modem bank. Don't forget rent, utilities, and your wages. Labor is less then then you would think. Use that number to figgure out what you need to charge to achive the level of support you want. (Remember quality costs money)
Once you are close to a 10:1 modem ratio cut back on marketing, but make sure you maintain it. (or expand your number of lines, depending on how many more customers you can reasonably get.
Australia is an english speaking democracy-land full of crazy capitalists. I'm sure the two markets are somewhat comparable.
Starting an ISP in the USA nowadays is most likely a mistake. Here's why:
The dialup market is almost effectively gone. Most ISPs now use their dialups to either add value to their existing services or because they service a tiny area with extremely dedicated customers. We service the NYC area and get only 1 or 2 dialup customers a month now (and lose 5 or 6), when they used to come in at about 10/day and we couldn't even meet the demand.
Dialups are practically sold as a commodity by big corporations who just want to sweep it up. You'll not only be competing with AOL, but AT&T, MSN, IBM, Earthlink, but also a bunch of ISPs that will give it away for free (like Altavista, of all people).
If you want to compete using other technologies, such as DSL, you'll have to deal with the phone company. Your main business will be selling the same technology that the phone company sells, but at a higher rate [because the telco prices it that way, since you're a competitor]. And when the telco downs your service for whatever reason, customers call you, not them. Your core business will center around escalating trouble tickets on behalf of your clients for DSL. There's a real reason as to why Northpoint, Red, and Covad have folded or are in deep shit. If you want to make money at this, you'd better have a lot that you plan to put down up front and won't mind throwing away based on the telco's whim. You will also compete directly with cable, which will almost always be less error-prone
The market is getting -more- saturated, not less. This is contrary to how most people thought it would end up (3 or 4 big ISPs dominating the continental US)
You will also deal with commodity web hosting providers who will host sites for practically nothing. You cannot effectively compete with them unless you either offer fantastic tech support or plan to provide custom development.
My advice for people starting new ISPs is that you shouldn't. It's a terribly bad idea. We're a small, established, conservatively run ISP (in terms of how we spend) and it's very hard to survive. We will survive, and we're finally out of the red, but it took us 5 years to get here, and the market back when we started is nowhere near as hostile as it is now.
If you're still interested: Forget dialups unless you really expect to target a strong niche market that AOL and the rest miss. I'd concentrate more on custom development for web sites (where you also host their sites), or finding some possibly untapped technology (like satellite internet, which could work very well in some areas).
If you live in a particularly metropolitan area, you could also concentrate on dropping T1's to huge office buildings and running ethernet to each client from there. That is a much better deal than the cable/DSL that they're probably stuck with. There's more sales involved than anything, though, with this approach. (Word of mouth doesn't seem to work as well for this since corporations don't generally get along as great friends within office buildings, least in my experience)
Good luck.
This all really depends on how big you want to be. Of course one starts small, and all that. I personally don't know the market in Australia, but I gather there are 1 or 2 major telcos/ISPs and some smaller ones. The big problem these days (in the US/Canada anyways) is that you really have to be pretty big to start an ISP. The start up costs are huge. People expect quite a bit these days. Think bandwidth (huge cost), hardware (you do want some damn reliable servers), people (tech support, customer service, admins, some management). Dealing with telcos, carriers and vendors is a nightmare, you need to advertise and market yourself. You need to properly configure and run mail/pop/imap servers, radius servers, terminal/dial-in servers, routers, you need to have a good architecture in place (even a small ISP will have many machines). You need to arrange for a news feed of some sort (many users will expect this) which will burn through your bandwidth in no time. You will need a professional web presence, and some tools for your clients to manage their accounts (or be prepared to hire lots of customer service people to handle simple things like password changes and mailbox purges). You need to have a proper account management system, and a hopefully automated account creation and maintenance system. And we're not even into the business and money side yet. Without a question you need to have good business sense, unless you know others to do this you will have to do the initial hiring. Then there is the question of is it worth it? From an experience point of view, if you don't have too much to lose it's definitely worth starting and running your own business. But these days with all the big ISPs tying up the dialup market and fighting over each others' user base there isn't much money to be made on dialup. The margins are very slim. Think about all your costs, estimate your client base (be optimistic), multiply those by $20-35/month and figure out how long it'll take you to make a profit. The big money is to be made providing 'business solutions': web hosting, ecommerce stuffs, connectivity. And you can't do those on any significant scale unless you're already big and well known. Sort of a catch-22. In summary, it's really really tough, (should have started 5-6 years ago, hmm?) but like many people here will tell you, there _is_ money in providing good, friendly and reliable service, people will still pay for this, despite the $10/month deals you see every so often. Probably won't make you a millionaire (even and AUD one), but you can make a living on it eventually if things to right.
"Hot lesbian witches! It's fucking genius!"
You need to ask yourself these questions:
Who are my customers going to be?
How many of them will there be?
How much will they be paying per Month/Year?
What service will I have to provide them?
How much will it cost to do so?
How long till all this starts paying for itself?
How many customers will do I need for that to happen. How many do I have to bring in every Month?
What is my funding going to be until things start paying for themselves? If it costs you $1.05 to bring in $1.00 in revinue you will not last long.
What could go wrong?
What did I forget.
If you look at the web site of the US SBA, (Small Buisness Administration) there is a lot of stuff on founding a small company. If you are not in the USA much of it will still apply and you probably have similar things localy.
You need to plan for all of this.
Erlang Developer and podcaster
Yeah...don't you need like 100,000 users at start and in two years have to be at 250,000 users?
I remember something like this where the numbers were just huge.
I am the Network Administrator for an ISP in Mount Vernon Illinois (http://www.mvn.net/). We currently provide dialup in the local calling area, ISDN, T1/Leased Lines, and wireless broadband. What I've seen from the three years that I've worked here is that yes, the services and QoS that you offer is important, but equally, and certainly no less, important is customer service. People still are not highly educated on using computers, and when they have a problem, 90% of the time they are going to blame you, the ISP, even when the problem is NOTHING to do with you. It takes a high level of person to person skill to overcome this obstacle. You can have all the routers, firewalls, servers, RAS units, etc, that you want, but if you don't have technical support people that can teach someone how to double-click over the phone, and not piss them off trying, you're going to go down pretty quickly. That's my main word of advice. Oh yeah, and get your blood pressure medicine ready, the phone company will give you hypertension if you don't already have it!
Instant Karma's gonna get you...
Hmm. I'm curious as to what trouble you had. Our company was started on $30,000 capital, and has broken even or been in the black ever since, now being a $1 Million company. This is in a very small population area, too...
Instant Karma's gonna get you...
First find out more about your potential competition. Call them up and ask for a technology description. Use local newsgroups & find some talky techies, get more detail. Possibly pose as a customer with detailed needs, get more information (be careful here - this could be a legal problem that would come back & bite you.) Now find a couple more similar ISPs around and discover what they use, how they charge, etc. Try & determine how healthy they are.
Details you'll be wanting are the technical specs but also how many customers do they have, what do they charge residential customers, what do they charge commercial customers, how many of each type of customer do they have, exactly what services do they offer, etc.
Now look at their upstream suppliers. Who are these companies using for upstream feeds? What is it costing them? What services are available? Try & determine if there are non-compete clauses in place.
Next familiarize yourself with the local applicable telecom laws. What rules govern the ISPs? What rules govern the phone companies you'll be working with?
Finally what are the conditions of the local infrastructure & economy? Are the phone-lines in such poor shape that disconnects are inevitable? Are there enough customers to support a robust ISP or is so-so service all that makes sense economically?
As many /.'ers will tell you in most parts of the world the PTT's are successfully killing off their competition. Presumably you'll be competing with your own local phone service, offering an alternative to their ISP (assuming they have one.) Do you think you'll be able to work with them? Have others been able to work with them?
With all of the groundwork in place consider if you can take on the job, or at least catalyze it / make a profit somehow.
Are you competent to start or run an ISP? Do you have access to folks who would be interested in going in with you, helping flesh out the plans into a working set of papers and if you were to somehow set up shop could / would they take positions in it? Can you develop & pitch a business plan? What would make investors likely to give you money, help you get started?
Finally once you've got all of the numbers in place will it be possible to make a profit or would you be better off spending your time on something else? Will you be able to put together the capitol, the technology, the support, the services, the advertising, the billing, the relationships in order to make this fly? Do you have what all of this takes?
Frankly I think the days of the Mom 'n pop ISP are over, muscled out by bigger companies with more capital, advantages of scale & connections.
Where I do see smaller ISP's making a comeback is in boutique-ISPs where specialized services are offered & overhead is kept low by expecting the customers to be technically proficient & help themselves. These geek-only services are often low-key & word-of-mouth deals run as a sideline by some enterprising local geeks. Things they offer are lots of access to some good webservers, gamer-services, IRC servers, newsfeeds, etc. These seem to make a reasonable profit but are self-limiting, probably won't support anyone directly.
Aside from that the big boys seem able to starve or crush their competition with often the issue coming down to which one hates less - the cable company or the phone company? In rural areas it comes down to the phone company or the satellite company but either way it's two giants.
I don't read ACs: If a post isn't worth so much as a nom de plume to its author then I wont bother either.
I agree. Wireless is the only way to go.
Dial-up has incredibly small margins--you'll end up making pennies per customer.
DSL is the game of the Telcos.. you'll end up re-selling someone else's service.
Cable is even worse.. It's resell or lease connections.. both are next to impossible in the US, don't know about AU.
Wireless is the only way to have complete control over your margins, and still make a profit. The initial equipment costs are high, but they are for the other options too. Though, in a rural area, you may possibly be able to find some cheap tower space (farms with CB towers or radio station towers), or even build your own tower. With the right equipment you can reach pretty far, and with a good network topology you can break your access points geographically and hop to many neighborhoods.
I worked at an ISP for a year, and although they went under recently, I can tell you the do's and don'ts that I learned from my company. Firstly, the cheapest and least demanding way to get customers and hence income is definitely not dialup or dsl. The latest equipment is too expensive, and each user only provides a small amount of revenue - less money than your tech support time is worth. After awhile, in fact, we let our dialup users continue to use the system, and we stopped billing them. So when they'd call we'd tell them that support was for paying customers only. If they tried to pay us, we'd tell them that we no longer offered that service (even though they were currently using it) :). Hey, it's nicer than shutting them off outright.
So how did we make our money? Simple. Reselling frame relay circuits. This of course cuts out the home user, who has no need for such a big link, but that's better anyways. It's much easier to deal with a dozen customers who give you $500/mo than a hundred that give you $5. We'd buy frame relay circuits in bulk from GTE or Pacbell and resell them to midsize offices as a 'value-added reseller'. Where this value comes in, I'm not sure - I guess it meant that when the circuit went down they'd call us and we'd call GTE/Pacbell for them. But hey, people paid us. :)
# wrote sig.txt, 23 lines, 31337 chars
With larger fish finally jumping into the waters of Internet connectivity, is there still room for smaller companies? I would think that any new ISP would not be able to survive by solely providing dial-up service, and would need to look into the possibility of providing DSL or cable connectivity. However, providing broadband connectivity is a significant and expensive venture, made even more difficult considering the current economic conditions.
Three friends and I started an ISP about a year and a half ago. We have made some money with dialup, but by far have made more money with webhosting and programming services. With DSL there is _NO_ way to make money unless you charge about the same price as a frac T1. The telco's have you over a barrel and are not willing to resell the service for a reasonable price. My suggetion to you, don't do things that can't pay for themselves. You can't stay in business if you do not break even.
--fatboy
I was involved with an ISP startup a few months ago. The owner has some very interesting business strategies and offered interesting technologies. It was going fine.
But.
He had to shut it down. Why? Because, although he was making money, the user base wasn't growing at a fast enough rate to the point he would be able to pay us all a _real_ salary. The compnay could support itself, but it could not support the people involved in it.
The key here, I think, it Capital. If you really want to be sucessful, you need to have enough stored capital, not to run the company, but to pay your employees, including yourself. You need to have enough cash at your disposal too keep the human side running while the business' user base grows to the point where it can sustain itself.
.
Hilary Rosen's speech was about her love of money and her desire to roll around naked in a pile of money.
Good advice, except:
couple of 20-gig hard drives, throw Linux with Apache, Sendmail (or Qmail), Radius
Only use Linux if you're comfortable securing it - if not you'll be owned in no time flat. If you want to run UNIX servers your best bet is OpenBSD
Not only has this already been asked, but Cliff posted the story.
Nothing important has changed since that story was posted. Use the search feature at the bottom of the page.
I'm a SysAdmin at a small Melbourne based ISP.
My best advice would be think again and if you still want to do it then think again...
Do a LOT of research and create a solid business plan. By the time you do that you'll probably see why I'm saying think again.
If you still want to do things and want some specifics on servers, etc feel free to email me (just remove the NOSPAM.)
Step 1:
Start 8 years ago.
It's virtually impossible to make an ISP work these days because of the overabundance of cheap access. There's no way a start-up ISP can compete with $20/all-you-can-eat. It's just not feasible to compete with that level of economies of scale.
Starting a Mom-and-Pop ISP is going to be nearly impossible if any of the nationwide ISPs have a Point of presence anywhere near your chosen market. Once you've established your market, you can be sure that the Big leaguers are going to notice you and soon offer service in your area, so you've got to drop those prices down below $20 a month ASAP.
In my humble opinion, it's not worth your time to start your own. There are opportunities to franchise with a larger ISP (I think), which might be a more realistic option.
by Mike Buddha -- Someday the mountain might get him, but the law never will.
This sounds exactly like what a company I worked for in 95-96 was doing in Kansas... except the 56k lines were 128k ISDN. (Still have an Ascend Pipe 50 in my basement)
They even got creative and hopped latas with cleverly placed pops to avoid long distance charges. With 128k ISDN unmetered from Southwestern Bell @ $105/month, it was cheap way to provide access to little towns.
This was also my first introduction to i386 *nix - bandregg, ksteph, and kleo the cat had Linux, SCO, and some variant of BSD running mail, news, and web, while an NT box did FTP and another https.
(wonder if you're reading guys... sure you were assholes, it was cool anyway.)
I did my time at an ISP, and your suggestions would never fly.
shell-only accounts
This is a security risk and legal nightmare. While 90% of subscribers are legitimate UNIX/LINUX users, you've always got that 10% who think they can use you as a platform to launch their cracks. Since ISP's can be sued if they are repeatedly used as a cracking platform, it's not worth the effort or the legal fees (FYI, if I can prove that cracks are repeatedly coming from your ISP, I can legally establish negligence on your part for allowing it to happen. It sucks, but it's worked before.)
static IPs
If he's running dialup, then ABSOLUTELY NOT. Static IP's encourage users to keep their connections alive all the time. If you've got a dialup with a 3:1 or 4:1 customer:line ratio, this will quickly swamp your service and cause busy signals. Busy signals are an ISP's worst enemy.
metered toll-free access
ISP's only prifit $1-$2 a month per customer as it is. If you charge the connection costs back to the ISP, you quickly end up with negative cashflow followed by bankruptcy.
"free" email accounts
For customers? Sure. Everyone else can bugger off.
maybe email virus scanning at the server
Again, liability issues. If you claim to filter email viruses and then someone gets one anyway, you will quickly find yourself on the pointy end of a lawsuit. If you CLAIM to filter viruses, you'd damned well better be able to stop them ALL. Otherwise, don't even bother.
game servers, irc servers, news servers
Cost permitting, sure. But with the tight margins modern ISP's have to deal with and the need to watch bandwidth usage to keep costs down, it's unlikely that a small rural ISP should be wasting precious capital on something that only a small minority of users will be interested in.
There is nothing so pathetic as seeing a beautiful young theory roughed up by a tough gang of facts.
This hasn't been a viable question since 1993 people, get real! you missed it. moron.
Umm, yeah right.
There's this little problem. It's called bandwidth. In Australia it costs lots money. Think of a high number, then triple it. I'm serious.
Then along with that, this poster is thinking about a regional area. Even worse. That number you thought of before? Double it. As other people have said, you needed to do this eight years ago. You might get something out of it in a regional area, but given the setup and ongoing bandwidth costs, you'd have to have a lot of money to burn before you started to break even.
Command attempted to use minibuffer while in minibuffer
Don't do it! I've seen many individuals fall prey to the evil ISP syndrome. ITS A WASTE OF TIME! You've got to have MEGA-CASH. IT SUCKS LEAVE IT! START A COMMUNE OR SOMETHING!
[Is Greek the Professional Language of Lawn Mowers?]
As some have mentioned, an ISP is a business, not a tech job. You have to figure out who your market is, what they will pay, before you can even figure out if it's feasible. Knowing nothing about Australia... I can't say.
It sounds to me like what you are asking for is a full business case study for your area, plus equipment recommendations.... something that you should be paying for.
http://www.waverider.com
Yes, shameless plug for my former employer (I only left because it was an offer I couldn't refuse).
Both LOS and non LOS products for exactly this kind of thing. Large, open, flat areas are ideal for LOS type service. One of the product lines is geared specifically towards launching urban wireless ISP's... including (I think) cost modeling the whole thing, showing how long it'll take to recoup your cost, etc. Full centralized network & customer management & billing software included.
If you want to be really simple, you only have to build one good mail server on top of all this, and you are set to rock.
I believe we (erm.. they) even have an office Down Under (company used to be called ADE?)
Don't let the website fool you; it's a bit marketroid.. but the products are there.
http://www.waverider.com
Yes, shameless plug for my former employer (I only left because I received an offer I couldn't refuse).
One of the product lines is geared specifically towards launching urban wireless ISP's, including (I think) cost modeling the whole thing, showing how long it'll take to recoup your cost, etc. Full centralized network & customer management & billing software included. They basically sell you a business model, equipment, and technology/training to make it fly.
If you want to be really simple, you only have to build one good mail server on top of all this, and you are set to rock.
I believe we (erm.. they) even have an office Down Under (company used to be called ADE?)
Don't let the website fool you; it's a bit marketroid.. but the products are there. There's more to it that what the website shows.
I was the sysadmin for a small ISP a few years ago. There were a lot of things I enjoyed about it, but there were plenty of headaches, too. I don't know about the cost differences between the US and Australia, but I'm sure a lot of the things I learned still hold true. First of all, you'll never make money on just dial-up services.
You *must* have some value-added services if you want a chance at getting any real profits. Even if you have to outsource it. Some good VAS: virtual hosting of domains/web/email, web design, office networking, colocation services.
Do everything you can to keep your systems secure. Sign up for all the major security-related mailing lists (BugTraq, NTBugTraq, and Vuln-Dev would be a good start), and apply patches and work-arounds as soon as possible. Don't think that just because you're out in the boonies that the crackers won't find you -- they will.
When possible, go above-and-beyond for customers. You can win some good customer loyalty that will help you hang on to them when UberProvider.net finally drops a POP in your area with prices that undercut your business. This is easier when you're just getting started, but be careful not to let people leverage your goodwill into free services. Driving out to a new customer's house to configure Dial-Up Networking for your service for free is okay (once), but helping them figure out how to do a table of contents in Microsoft Word is consulting work.
There is no such thing as "unlimited" connect time or disk space. If you offer such a thing, somebody will eventually take you at your word and abuse the spirit of it. Set reasonable limits, and wherever possible, automagically enforce them. Configure your dial-up server to automatically terminate connections after so much idle time or continuous connect time. Configure user and group limits for hard disk space. Track and throttle bandwidth on web pages. But don't be too restrictive. Make it "feel" unlimited for most of your users. Only the power users will use more than 100 hours/month of dial-up time (actually, the majority of users will probably use significantly less than 50hrs/mo). But offer reasonable alternative plans to cater to the power users. If you have several technically savvy customers, try to leverage them. Set up local tech support forums and offer discounts for customers who can help moderate them.
Plan for growth. If you aren't willing to commit the resources (financial or otherwise) needed to grow your business, you probably shouldn't start in the first place. Keep your eye out for new markets. When dealing with dial-up in rural areas, you want to find places where a single POP is a local call for many surrounding communities. For example, in my area it would be easy to make the mistake of installing a pop in Dothan, which is the largest local city, with a population of about 50K. But it would be smarter to put a POP in the tiny little town of Daleville. Daleville is a local call from Dothan, Enterprise, Ozark, Fort Rucker, and several other smaller communities which would have to call long distance to Dothan.
Good luck!
--
Ernest MacDougal Campbell III / NIC Handle: EMC3
Ernest MacDougal Campbell III
geek ramblings
A friend of mine and I have started an ISP for very few start-up costs. We accomplished this by renting lines from UU.NET and then we provide the mail/radius, etc servers. They are in a data center. So it's been very inexpensive for us, and the dial-up line quality seems to be very good frmo UU.NET
Swift-Networks - Nation Wide ISP!
I work for a small company who, two years ago, had a lot of extra cash and were expanding their business. One of those expansions was in the ISP area.
They saw money to be made, but had a guy who didn't have the knowledge or experience start it. That was their first mistake, they should have gone with me from the beginning, but I didn't take over until 5 months later after they fired the previous guy because nothing ever worked right.
Poor decision after poor decision was made with this guy in charge. First of all, the purchase of a $15k PIX firewall, in spite of my many arguements against it. Simply no need. Start small. Another horrid purchase was the purchase of 2 $40,000 servers to handle everything, running NT4. 4 or 5 $1k servers running ANY OS would have been MORE than plenty, and a much better solution than 2 mega-servers. This was all done due to lack of experience and research.
Anyway - Their idea was to cater towards the businesses, for web hosting and ISDN dial-up. They didn't want the large user base of cheap home-user dial-ups. And they didn't want the volume of basic $20/month websites. They believed they could charge $50/month, and offer the same service as $20/month services. Why? Because they rented space at a high-tech computer room. Problem was, no one really cared, and few were willing to put out the extra money. I believe this whole business idea to be a mistake, volume is priority #1 in this area.
Another mistake was using Windows NT. Sure I think an ISP should have 1 or 2 Windows machines running Microsoft technologies, such as ASP and MSSQL, for those who request that. But basic services such as POP, IMAP, SMTP, DNS, RADIUS, and well anything possible really, should be run on a *nix environment. I'm a FreeBSD advocate myself, but Linux would probably be a good solutions as well.
Anyway, nothing really deep here, just a few basic things I've gathered over the years. One more thing I will say though, I have NEVER regretted our decision to go Cisco exclusively. There hasn't been anything I've needed our routers/switches to do that I haven't been able to do with our Cisco products. They certinally cost, but in my opinion, you certinally get what you pay for.
I've tried to find some independent local providers here in Atlanta and failed miserably to turn up anything worthwhile.
Having said this, if you become successful, please don't sell your business to the first corporation who comes along and offers to buy you out.
Grow your business at a reasonable pace.
Don't keep changing the "focus" of your business or your "target audience".
It terrifies me that I don't have much of a choice in who services me anymore.
Do I want a fast connection? Yes. Ooooooh yippie, you mean I can choose from TWO providers?! Wow. Do I want a static IP? Great, that limits me to.... one.
Above all else, try to make your customers happy. If you're being completely swamped with complaints, you're doing something wrong.
If a customer has to wait on hold for 3 hours to get something fixed, you're doing something wrong.
Don't become to egocentric. If you do succeed, remember that it's your customers who put you there, try to treat them with respect.
I long for the days when customer service was customer SERVICE, not "let's give them the runaround until they hang up because they don't have a choice anyway"
http://www.lariat.org
Lariat is the Laramie Internet Access and Telecommunications group. It's an ISP co-op in Laramie, Wyoming, run by users and for users.
They have some information on their site that you might find useful.
J.J.
Good point. For a Linux distro, Debian seems to be nice and lightweight for servers, but you really need to keep up with updates on ANY O/S, *BSD included since you might be running, e.g. BIND. Subscribe to BugTraq, CERT, and whatever else you can find and hope you can install the fixes before then. There are also some hardened Linuxes out there, with StackGuard protection of all programs and so forth.
Okay, OpenBSD "out of the box" is more secure than RedHat and some other Linux distros out of the box. Happy?
In the U.S., though, I've worked for an ISP who goes into a lot of little towns where there is no (or little) ISP service. They usually start out with 12 phone lines, which in US dollars is about $300 a month, and a frame-relay 56K connection back to the main ISP which is another couple hundred dollars a month, an Ascend Max 4000 or Portmaster III which you can get on eBay for not too much.
Webserver/mail server/DNS server? Heck, get a couple of lower end Celerons with, say, 128 megs of ram, a couple of 20-gig hard drives, throw Linux with Apache, Sendmail (or Qmail), Radius of some sort (I rather like FreeRadius) and BIND on them, and Ka-boom: instant servers.
Generally, what they do is say to the town: something like, you guarantee us X number of users, and we will bring Internet service to this town. Many times, the people will sign up (and pay!) for service before the ISP even gets out there, thus making it more or less a sure thing for the ISP (and for the users, since if they don't get enough people, the ISP gives the money back).
The big ISP's pretty much ignore smaller communities, so there is still a very large untapped market (at least in the US) for Internet service to small towns or rural areas. You can actually get quite a lot of users online before you have to get more phone lines and higher bandwidth, as well.
So, to sum up: minimum needed to be an ISP in a smaller town:
- Internet connection, at least 56K Frame relay,
or higher.
- At least 12 phone lines.
- Dialup server (e.g. Ascend Max 4000/Portmaster III, or linux box with multi-line modem cards)
- Web/DNS/Mail/Radius authentication server
Celeron 400, 128 meg Ram, 20 GB drive to start
out. You can make these separate servers, but
I've seen people run up to 500 virtual apache
domains and about 10,000 email boxes on the
same machine.
- Ability to remain calm under all customer calls.
That's my 2 cents.Then open up a spreadsheet and figure out the financials yourself.
Having co-created the first local ISP in a 'secondary city' back in 1994, I have some perspective on this. Also some perspective in having branched out to many smaller cities.
Having a single, local, crappy ISP is absolutely no reason to get into the ISP business. It is a headache and a half, and it will consume your life. As mentioned in the various posts, the technical end isn't really all that bad. It is the business/customer/industry/profit side of it.
If you are ABSOLUTELY CONVINCED you want your own dedicated connection and you want spread your cost, then you might want to go the somewhat more profitable route, which is web consulting / web hosting, with dialup access to support your customers. There is some money there.
Dialup? You've got to be on crack. You're overwhelmed by all sorts of new users who are low profit margin accounts and require lots of support.
I think that a lot of people are missing the point and have never beedn in the situation that he is describing
For most of my life I lived in a rural town. To call ANYWHERE outside of that town was long distance. There are still alot of towns like this. In this situation for internet access you pay both your provider and HUGE long distance bills.
I would have had access much sooner had there been something like he is describing.
A lot of the people that post here are like me and spoiled by broadband. Well... That's not available everywhere.
actually, 10mb would be milli-bit.. even worse.
--
"It's tough to be bilingual when you get hit in the head."
You're misinformed. Cistron Telecom is now a 100% competitor to the KPN monopolists and do have access to the last mile. Cistron has it's own fiber network, own SS7 switches and own DSLAMs and IP network. In fact Cistron even does wholesale to other parties, just like KPN does with mxstream.
And mainstreet didn't have the first DSL connection in Amsterdam. People were doing that in 1993.
Living is a horizontal fall
Mmmmmmm, pork chop dubber.
Just like Mom used to buy.
No boom today. Boom tomorrow. There's always a boom tomorrow. - Cmdr. Susan Ivanova
Tech support for newbies is, by far, the biggest pain in the a** for an ISP. Eliminate them, the job of running an ISP becomes almost enjoyable.
No boom today. Boom tomorrow. There's always a boom tomorrow. - Cmdr. Susan Ivanova
And tomorrow's Ask Slashdot: How to start a successful chain of gourmet coffee restaurants!
/. as well; after all, the TA isn't around 24/7 like you people are. Besides, compared to some of the stuff posted on here, my homework is very important.
Gee, I should be submitting my homework questions to
I hate to reply to my own post, but someone modded it as Flamebait, and I have to respond to that accusation.
There is a load of technical, financial, and industry-related information available about a wide number of topics. One of the very important steps to be taken in beginning any business project is to DO YOUR RESEARCH! And it's one of the talents of businesspeople to be able to take an abstract idea and fill in all the details.
The fact that this story was posted on Slashdot does a grave disservice to a lot of people involved:
* The Slashdot community sees an Ask Slashdot where a relatively vague and unnecessary question is asked... never mind a question posed arrogantly enough to assume we should tell him how to start an ISP. I'm not saying that the author of the question meant to be flamebait himself, but perhaps they are inadvertently being lazy and helpless. Some Ask Slashdot questions are actually quite interesting, yet get posted on the back page and recieve 4 or 5 comments. Why this happens, yet this one gets posted on the main page, I don't know.
* The person asking the question himself is doing himself a grave disservice by asking such a broad question on here without actually going through the steps that it would take to make a successful business plan. He's enlisting us as his consultants... while some of us don't mind being armchair consultants, it's like asking the people who call into sports radio shows to do the Super Bowl coverage. We don't know shit because we don't do research, and even if we did research on the business plan he needs, we'd never be able to tell him everything in one posting. He should go out and do his own market and business research so that he is BEST able to make a decision on his ISP idea.
* The future customers of this ISP are potentially going to be buying a service from a person who asked how to run his business on Slashdot. I already feel sorry for them.
I admit, I'm being a bit drastic, overdramatic, and exaggerating here... but the moral of the story is the same. The best helpful advice we can give this guy is to do his own research. Ask Slashdot is helpful when the guy has a very specific technical question, and even then it's a bit questionable that this is the proper forum to ask those kind of questions (it's alright, I guess, but not perfect). But for such a general and broad question, this guy has got to find the answer for himself.
My sarcasm doesn't quite help the situation, but I thought I'd use it to point out how thoroughly ludicrous it was for this question to make it to the front page. Then again, Slashdot isn't my site, so they can run it however they want...
Telstra's high costs come from the fact that they don't understand modern phone systems and are clueless with rollouts of new stuff so they have to do it lots of times till they get it right.
They installed a E1 line for our RAS and installed about $20,000 worth of kit to give us one E1 circut. If they had a clue they could have done it for much less.
How to Build an ISP
--
--
"I personal[ly] think Unix is "superior" because on LSD it tastes like Blue." -- jbarnett
With all due respect to that person of questionable intelligence who posted that rant about asking Slashdot about this as opposed to doing "research", well, I am the "pop" half of a "mom-and-pop" ISP in Houston, so I can probably give some sort of useful advice. In fact, in my opinion, and I've been doing this for most of the last decade, this sort of question asked in this venue is likely to produce more useful information than going to some library and trying to find a book that describes how to run an ISP. I really pity someone who tries to figure out how to start an ISP by reading back issues of "Boardwatch".
The first thing that I recommend to people who want to start their own ISP is professional psychiatric help. (In fact, I have the names of several very good psychiatrists and even a psychologist or two in and around Houston, TX, US.) If that doesn't convince them that it's more fun to go broke on a trip to Vegas than to accomplish the same task by starting an Internet business, then I can get down to brass tacks.
So, the advice (some of it contradictory) observations, and opinions in no particular order:
I'm sure there's more, but that's enough for now.
Why a vISP?:
No hardware to buy
THOUSANDS of national access numbers
You can make a tidy profit in rural areas by simply running a newspaper ad.
How:In the area I just moved to, there is very little DSL/Cable. The only local ISP charges $24.95 per month. I have just signed with a vISP tp provide service here, and I am being charged $8.00 per account. I can charge a paltry $15.00 per month, make a decent profit, undercut the other ISP, and offer the user the SAME phone number the local guy uses, as well as a 10mb website, 2 email addresses and free tech support
Amount of work by me?
Where:
DialUp USA - My provider
Google vISP Search Results
Google-vISP- UK Results
CNET ISP Pricing Chart-You can still offer lower rates than any of these!
Bottom Line: 500 users x 7.00 profit = $3500 a month. Think about what you could do with a few ads and a few websites in different areas.
Not all. You just have to look for them.
I use a "mom and pop" for my dialup and I love it. Very personal support, competative rates, decent speeds.
In Soviet Russia...michael would be rotting in Siberia!
I did just that. They weren't sure how "moron cunt" made you look more intelligent, but I assured them it did.
2 million last year in the black.
Not bad for mom and pop.
In Soviet Russia...michael would be rotting in Siberia!
It'd be hard to find someone to sell you IP address blocks nowadays, (I know class A's are close to impossible) so that will be a big factor thats for sure.
Well I would say for the mail and DNS servers you wouldn't need anything fancy since they're not processing scientific stuff or crack rc5 or so. So for mail servers even a couple of pIII's would be good.
Routing equipment... Having tinkered with only BayNetworks, Cisco, and Juniper, I would say stick with Juniper Networks (possible an M160) for large BGP networking (OSPF is a pain), for internal you could use like a BayNetworks Centillion. Cisco is overrated to me. Or if you really want to cut corners then get a Sun Ultra10 and slap on Zebra (but thats rather ghetto)
If your going to be doing VoIP stuff, PBX's are rather expensive, but I would look into the Merlin's from Lucent which was a fairly good experience for an older company I worked at, and it was the cheapest. However timeframes to get PBX's involved out here suck so if your local telco is in the same market as a vendor your looking at, prepare for a wait.
I don't know the prices of everything entirely (since my co is partnered with many we see discount prices on all this crap) but it can go into low-mid 6 figure digits.
Want Root?
It'd be hard to find someone to sell you IP address blocks nowadays, (I know class A's are close to impossible) so that will be a big factor thats for sure.
Well I would say for the mail and DNS servers you wouldn't need anything fancy since they're not processing scientific stuff or crack rc5 or so. So for mail servers even a couple of pIII's would be good.
Routing equipment... Having tinkered with only BayNetworks, Cisco, and Juniper, I would say stick with Juniper Networks (possible an M160) for large BGP networking (OSPF is a pain), for internal you could use like a BayNetworks Centillion. Cisco is overrated to me. Or if you really want to cut corners then get a Sun Ultra10 and slap on Zebra (but thats rather ghetto)
If your going to be doing VoIP stuff, PBX's are rather expensive, but I would look into the Merlin's from Lucent which was a fairly good experience for an older company I worked at, and it was the cheapest. However timeframes to get PBX's involved out here suck so if your local telco is in the same market as a vendor your looking at, prepare for a wait.
I don't know the prices of everything entirely (since my co is partnered with many we see discount prices on all this crap) but it can go into low-mid 6 figure digits.
As for the negativity with everyone stating its a losing venture, you fail to see that not all countries have the same availability as we do so it may be a winning venture there.
EOF
Want Root?
I've done a paper on e-startup businesses, although I know nothing about the Australian ISP market.
To be honest, you've got a really tricky business proposition here. One big problem you're going to have is how to differentiate your ISP over all the others, while maintaining a cost competitive profile.
Just starting out, you've got a substantial scale problem, in that AOL, or whoever serves such a purpose in Australia has you beat on infrastructure, period. Their help desk/bandwidth/server structure will be bigger than yours, and more extensible. Note that I'll use AOL as a proxy for "the large Aussie ISP" from here on out.
Similarly, I suspect there's nothing you can do that AOL can't emulate, imitate, or outright steal. Even worse, your lawyers are going to pale in comparison to the amount of work AOL's lawyers can throw at them, so even if you catch them, it's possible that AOL will just keep it in court forever while you spend money and (more importantly) personal bandwidth on the lawsuits.
To be blunt, I can see why one might want to do this from a technological standpoint, but that's completely different from attacking it as a business.
A couple of ideas:
1) Do a target market survey. Whom, exactly, do you want to serve? What are the implications of that market? My guess is that you can't compete with the AOL in getting newbies to sign up, but maybe there's a anonymity thing you can pursue among established internet users, which changes the demands upon your infrastructure completely.
2) Look for whitespace in the big ISP's offerings. An example would be examining closely what the big guy doesn't do, and attempting to fill that niche. An example would be web hosting, static IPs, etc. I have this problem with the cable ISP we use right now, in that I can't put my IP address in DNS.
Some other poster had a neat idea about small town internet access. What about extending that to nursing homes, community centers, etc.? You can go in, have control over the hardware, and maybe teach a class once a week to add value to the users.
3) Keep your business model flexible. There was an interview with Bill Hewlett about how, in the early days of HP, they did all sorts of stuff with the laser technology they had expertise with. They did a home security thing, a bowling lane foul indicator, and tons of other junk. No longer term strategy, just stuff to pay the bills. In that case, they had a hammer, and tried numerous nails to see if any of them would become absurdly profitable. In the meantime, their nascent company stayed solvent, which is nontrivial.
4) Get business people involved early. What is the problem that you are trying to solve for your users, and can you make money doing so? I suspect that doing a large scale ISP is untenable, considering the competition, so how do you get a niche? How do you keep the customers you sign up?
To summarize, know the people you want to serve, the pain you want to solve for them, and get cash flow before worrying about profit.
--joke--
Other than that, it's just a matter of execution.
--joke--
Good luck.
ceci n'est pas un sig.
I've done extensive contracting work for "local" ISPs and I can tell you that they are in no way on their way out. Most people out there are happy with dial-up and aren't interested in the prohibitative prices of broadband. I recently completed some contracting work for an ISP in Western Pennsylvania and they went from 0 users to 1500+ users in about 3 months. There are four major keys to having a successful ISP:
/. community on this point but that is what people want, especially from their local ISP. They don't want to mess with FTP regardless of how good the directions are. They want to use their nice shiny pre-packaged Microsoft Web Publication Wizard.
1) You have to be financially committed to grow. When your dial-in lines are full during peak times consistently you need to add more. Nothing will cost you users faster than an ISP that rings busy for 20 minutes before a user can connect. A good rule of thumb is to have enough lines to support 25%-30% of your userbase being connected at any one time. Keep good logs of connect times and if you need more lines, buy them!
2) Provide good service. People will stick with the ISP that provides good service to user's problems, even if it's slightly more than the ISP down the road. Get a good ISP management tool that makes handling your radius/dual-up authentication, e-mail and other services easy and hire a couple of minimum wage people with half a brain to field "1st Level" calls -- high school students would be perfect in this area. That'll take care of 90% of your problems with users who most likely can't type their password or fiddled with their settings. Turnover in these jobs is high, so make sure you have a dummy-proof system that makes training a new hire easy. There are many freeware FAQ/Knowledge Base applications out there to automate this. The one application you DO NOT want to use is ISP Power no matter what their salesman says.
3) Have a solid person or persons behind the technology side of things. Either do it yourself if you have the knowledge, hire someone knowledgable or contract out the work (what I do part-time). Corporate IT is a lot different than ISP IT. Hire someone who knows routers, Radius, etc.. They need to be articulate becuase you'll have an uphill fight with the local teleco for both your frame connections and your Dial-In BRIs. Remeber that local Telecos push their own ISP service and you will not get good support from them if you're an ISP. You need to have someone prepared for a long drawn-out battle who can provide sound answers and be able to monitor and gather data on bandwidth and performance with which to bombard the teleco's tech support. The first words out of their mouth will be "Do you have your router configured properly" and will hammer this at you until you prove conclusively that it's not your router. You need to pick a platform and stay committed to it. Pick an e-mail server that is EASY to configure and maintain. MDaemon for NT/2000 and Qmail for Linux/Unix/BSD are good choices. Pick a hardware vendor you can have a good relationship with. 3Com is an excellent choice for ISP type hardware. Very few ISPs needs the power of Cisco equipment.
4) Take security seriously. Your 31337 Skriptors love to find ISPs with little thought to security or else security that has gone lax. Enforce a password policy, keep good logs and have monitoring systems up and running. Have a zero tolerance policy for spammers and other crackers. Invest in at least a minimal firewall setup for your servers. Spend the time to learn the Unix tools for firewalling or look at a good NT package such as BlackIce (again depending on chosen platform).
You can still be very successful with dial-up ISPs. Broadband will eventually either become cheaper allowing local ISPs to compete in that area or the government will eventually crack those markets open. It's just a matter of time.
One last thing, offer Front Page extension support! I can hear the booing from the
Some people take their .sig way too seriously
WebDAV is available with apache webserver so that can be used to cater to the MS FrontPage users.
For 240 users/24 simultaneous users, it would cost $695 USD a month for T1 dialup bank (PacBell) which is faster than T1 but much slower than T3.
To charge 9.99/month per user is a pitiful trickle-down to your profit margin (if you factor in your bandwidth cost, rack rent, electricity, IP Class-C address, maintenance of a grand total of $1250 a month). You can cut only so much ($150/m) by trucking your T1 line to your home.
If you want to pay yourself $100,000 a year (snicker) and work 90+ hours a week with account receivable, account payable, taxes, and unpopular tech supports for newbies as well as repairs doing this all by YOURSELF, you would need to attain a critical user base of 2,500, which of course, you'll have to install 250 more dialup lines, which spirals the cost up fast then slowly in an inverse logrithmatic scale to...
An actual critical user base of 2,800 is more like it to just attain your 100K/year salary.
By then, you'll want to start hiring specialists to offload your poor, tired, overworked mind.
Thus the vicious cycle begins of garnering more user base just to pay for those employees.
Godspeed.
1. buy a dummies book (or if you're too broke to do that, just post on
2. ?
3. make your first billion!
(credit due to UGVCA - Underwear Gnome Venture Capital Associates - for their patented 1-2-3 startup process)
Perhaps we can suggest some other categories, since all you need to do is look for opportunity, and you know there's a buck to be made! Some ideas:
- commercial aviation
- copper mining
- nuclear power plant construction
- shipbuilding
Any others I'm missing? Let's help this bored Aussie college student make his first million!
*scoove*
Ahh! Yes, exactly! I've been wishing for so long that I could find a place like this in the desert of Qwest and AT&T. Of course it won't be the most profitable ISP ever. On the off chance that this is your primary reason for setting up an ISP (ie, you and your friends want "real" connectivity instead of going with a big dumb name), see about setting it up as some kind of cooperative. Hell, you could probably even get nonprofit status if you did it right.
But a mass-market, for-profit ISP? Good luck.
---
If you get a chanellized E-1, which is required for 56k (T-1 channel in the US usually costs less than if you purchase per phone lines) you will start with either 29 or 30 channels/lines depending on how the telco sets up signaling.
In the US there are penalties for renting only a partial circuit, you pay more per channel.
For those who do not know, E-1 is European/Aussie circuit equivalent to T-1, but due to differences in signaling they get 2048 Kbps, as opposed to the US 1544 Kbps. Sweet, eh? :)
Get off my virtual lawn, you damned virtual kids!
- Speak to your local telephone company at length. Ask them questions like "how old is your wiring", "do you support channelized E-1 lines for 56k dialup", "do you use load coils to extend your reach", and "what kind of distance charge do you have for bringing in a data connection"?
- You must be a very, very patient person. Be prepared to work long hours with the telephone company and your data connection provider. Be prepared to have them give you conflicting information. Be prepared for your local telephone company to pass the buck for connection difficulties to you. Be prepared to call your local telephone company on the carpet.
-
Ask your data provider and your telco to provide you with their tech support hours. Ask them for direct phone numbers and contact names. If they limit their hours, ask them if they have extended support options.
-
Get to know all of your service representatives on a first-name basis. Send them Christmas cards. Be nice to them. You may need to call in favors some time at 3:30 in the morning when your data circuit dies and you have to call their tech support.
-
Expect to spend more money initially than you bring in. Do not expect your business to pay for itself in under twelve months, meaning have at least a twelve months' supply of operating capital available (the more, the better.)
- Suscribe to your competitor's service. You have to know how they perform, they set the standard which you must at least meet, or exceed.
- Give referral credits. Give a $5.00 discount on a month's service to anyone who refers a friend to your service.
- Pinch your pennies (or your five cent pieces
;).) You do not want to be a dot bomb. Have a three year business plan in place when you start up, stick to it.
- You are a utility, not a service. In the rural area where I live I advised the small startup ISP to sell themselves as a utility, meaning they are more like a cable company or a satellite TV provider than a service. In my opinion this helps to foster a "must have" idea in customer's minds.
- No one ever brings in a television to their cable company office saying "my TV is not working, what is wrong with your service", but they'll do it to you with their computers. Be prepared to answer all sorts of ridiculous questions, face all sorts of ridiculous situations, and have at least five percent of your neighbors actively hating you.
:)
- Get an unlisted telephone number. People you do not know will be calling you at home at 4 AM, screaming in your ear, MY SERVICE IS NOT WORKING.
- If you are starting with yourself as the only employee, be prepared to forgo a social life. Search "monasteries, coping skills, celibacy" on Yahoo. Implement their suggestions.
- Know your equipment. Be prepared to study, study, study. Neither your telephone company nor your data provider are likely to be experts on the equipment you purchase, so be prepared to be on your own in configuring equipment. Before you buy, see if your telco has any prefered RAS equipment. As a suggestion, see if the equipment provider will work with your telco in configuring equipment.
- Find a support group. Get in touch with a few other ISP's not in your area. Use newgroups. Keep on good terms with knowledgable friends.
- Know your local laws regarding Internet and telecommunications. Get a user agreement, have it gone over by an attorney, and enforce it rigidly.
- Finally, never turn down a prescription for Prozac. Prozac is your friend. Prozac makes it better. Prozac may keep you from strangling the next guy who walks in and asks "I just bought a Commodore 64 at a rummage sale, and I cannot wait for you to connect it to the Internet."
:)
- HEY, which reminds me of one more suggestion -- know your limits. Are you going to try to connect any DOS machines? What about Macintosh? How slow of a modem is acceptable?
:)
Think it over, carefully. It's not a living, it's a lifestyle. Go with God.Get off my virtual lawn, you damned virtual kids!
Most small ISPs there days seem to either get bought out or more often they just don't make it. It is hard to compete with the Big Boys.
Also there are so many options out there. You need an edge that makes people want to use your service over another. You need to ask yourself...what would make a person want to use my internet service over another service that probably costs less?
I don't think setting up and ISP would bo too difficult. The problem would get in getting enough customers to cover the costs.
FoonDog
I and a few friends kicked around the idea of doing that a few years back. After writing up a business plan and running the numbers, we decided that there was no way we could make a profit doing it.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
If you can afford to start an ISP with the cost of data (let alont the rest of the business costs) in Australia, they are far better things to do with your money. Telstra have a bit of a strangle hold on the isp market running large portions of the nations backbones and telco infrastructure. You have to rely on them for not only data (not cheap by any means in australia) (in most situations) but also for your dial up lines and they're out of date copper lines to homes. In rural Australia.. thats alot of hassle. -tomic
That said, if you do want to do it, first thing you'll need to do is make sure your business plan will be profitable. I know it's tedious, but sit down in front of a spreadsheet program and work it all out: hard questions include:
Now assuming you've asked yourself the difficult questions and got satisfactory answers, go out and find yourself a good accountant or at least someone who'll take care of the day-to-day finances for you. If you're a scatterbrained geek like I, then you'll have to reel in some favours perhaps. I use my wife for that sort of thing - it works quite well ;)
Then, and only then, do you start to work out your network map, and do all the fun stuff. Don't be a Dot Com ;)
Note: I've been brainstorming while writing this so there will be a lot I've missed out. I've rescued and set up ISPs and businesses before, some of which have succeeded and some of which have failed. I speak from experience of 1991 through to the present, so don't take this as a base course in setting up a business ;) - usual #include <disclaimer.h> I'm afraid ;)))
Joel.
Smegma.
If it's in a capital city, then there's heaps of competition. Every phone company has an ISP on the side (Telstra, iPrimus, Dingo Blue, etc.) So you'd better not be planning on competing with those sorts of people on price, because they've got good access to phone company equipment, and good economy of scale.
There are still some opportunities to set up in country towns; look at kisser, for example. If this is the sort of thing you're into, then you need to be looking to someone who is running such a service for advice.
As to equipment, you have three choices: UNIX, Microsoft, or easy-to-admin embedded boxes. (Cobalt are a good starting point for these.) OK, so I'm simplifying a little. My point is that you have to decide what you're most experienced with, and then keep it simple, stupid. Don't mix Windows and UNIX. Yes, they can be made to play nice, but no, you don't want to double your learning curve.
One of the really fun bits in Australia is dealing with the phone company. 56k modems, at the non-customer end, don't reside on the ISP's property; they reside in the phone company's local exchange. (One of my friends was bemoaning the loss of huge racks of modems covered in cool flashy lights that used to impress the hell out of visitors.) That means that you hae to deal with Telstra, and since they are still all but a monopoly (particularly here in W.A.), they aren't particularly interested in dealing with you. The result is likely to be a nightmare. I dumped my previous ISP simply because the dialup I was using sucked -- the modem at the phone company end couldn't hear me clearly, and my modem couldn't hear them clearly, and the result was dropped connections galore. Of course, if you want to stay down in 33.6k land, then you can put rack modems on your own premises (and you could probably pick up some cheap secondhand from other ISP's).
Is regulations and cost. Does anyone here know how much a Telco pays to get space on anyone's tower? Thousands of dollars a month. Because they don't have to maintain it. Believe me, as soon as the Telco finds out about your tower (if you rent it, and setting up commerical towers is even more so expensive), they will buy it out from under your feet.
In the US at any rate, the regulations on such things are completely insane. Remember that there is no allocated bandwidth for wireless communications, meaning that if the US changes the rules, you could be in for some serious equipment changes later in the game. I don't know how it is Down Under, but I would guess your FCC-eqiv has similar rules. So I'd do it, but don't go wireless.
Just find an existing, failing ISP and buy them out for pennies on the dollar.
I do not deploy Linux. Ever.
I helped start up an ISP in a small town in Mexico (and still provide tech assistance to the current owner).
First of all, had I known what it was going to be like, I wouldn't have done it. As someone else posted, the newbie questions are a nightmare, and unless you're the only game in town, you're going to have to handle it.
As for equipment, figure on 1 modem for every 5-8 users to start with. You can expand from there. Get an AscendMax for the dial-in stuff (avoid multi-line serial strips and external modems like the plague. These things are a maintenance nightmare). Get Radius or FreeRadius, and some sort of ISP billing software. Not 100% necessary for the billing stuff, but it sure makes life simpler.
Okay, this is VERY, VERY, important for a small ISP with limited bandwidth: If you're running Linux (or another *nix), run Squid... It will save you TONS of bandwidth. We saw a 60% reduction in bandwidth when we installed it. This cuts down on your costs significantly, as you can add more modems with less bandwidth.
You can probably get by with 1 or 2 servers. A small ISP doesn't really need much in the way of processing power. We were running 32 dial-in lines and a couple of 64K leased lines to other ISPs in other towns, over a 512K line to our provider. Our most powerful server was a 300mHz Pentium II, I think. None of the machines ever approached 50% CPU usage.
I don't know what your situation is, logistically, but we did some wireless ethernet stuff as well, but that required getting a license (a real pain in Mexico) and then putting a transceiver on a tower (which we had to buy and have installed). From this we were able to offer up to 1M/sec to some of our clients (Internet cafes).
Most importantly, you ask, is it worth it? Tough question. The tech support is a nightmare. Because of competition, if you have any, you can't price things very high, so it doesn't make you a lot of money unless you're huge. You also need 24hr monitoring of the system, even if it's only a program that can page (via modem) you when there's a problem.
I certainly wouldn't ever do it again, but the guy who's running it now is enjoying it. He hired some other guys to do all the tech support, so that took care of the biggest headache. I doubt he's making much money, though.
At least not here in the states. Maybe it was worth it 10 years ago, but definately not now. 1) We're currently going through consolidation; only big ISPs will survive. You wanna compete with Microsoft, AOL/TimeWarner, and Verizon? Can you match their deep pockets? 2) You're basically forced to compete with the phone company as an ISP, while simultaneously buying service from the phone company... uh, does the phone company have a slight competitive advantage here? 3) Break-even is harsh. Do the math -- you've basically got to have at least 500 to 1000 customers just to pay for your T1 (admittedly, it's been a few years since I did these numbers). Until you get those first 1000 subscribers, you're loosing money big time every month.
On the plus side, with the dot com bust, used network equipment should be REALLY cheap right now, and interest rates are low, but I still think it will take you forever to amortize your startup costs.
Summary: definately don't do this for the money. If you can afford to lose money, and want to do it for the fun/experience of it, go ahead.
"Freedom means freedom for everybody" -- Dick Cheney
I worked with small ISPs trying to go head-on with the local phone companies in rural Wisconsin, and believe me, even though it's illegal for them to pull the kind of BS they did, they can get away with it.
THey'd do things like randomly disconnect all our dialup lines every few months, and take a few weeks to fix it; introduce bursts of noise on our dialup lines; and this on top of their incompetence.
If you have the money, knowledge, and guts to try, attempt to bypass dial-up lines. If you can supply broadband access to cable and DSL users, in addition to wireless, you might have a chance. But these are infrastructure-heavy items. Just don't assume that because the existing service has lots of disconnects that you can do anything about the dialup end of it.
As the friend (MBA friend) of many Dot-Com Busts, I would just say to you: Don't get too big too fast.
You want to be big enough to fight that other company, but if you don't have to offer a service right from th start, DON'T...be big enough to beat them, and then come out and show them CERTAINLY who's boss!!! You don't want to go down the same line as my friends, invest too much at the start, and then not be able to keep going.
------ This has been provided as a public service! ------
Besides the offering of DSL and other things people have suggested, you should probably offer quite a few services.
A local ISP here has been around since '93 if i remember correctly and they host and manage the websites for most of the radio stations here, as well as other local (Memphis,TN) businesses and such. Providing shell accounts would also be something that the 'big boy' ISP's don't provide.
You can't compete with the 'big boy' ISP's on their level. You have to provide things they don't offer. It's that simple.
Chaos, Mayhem, and Destruction: Not
They do not try to be the lowest price in the market, and many even charge AOL style prices for their dial up service. But, they do everything they can to insure that their service 'feels' faster and better and friendlier. They always have a real person answer the phone. A lot of times it's a two or three man show--but they answer their phones when you call with a problem and they look into the problem right then and there--no trouble tickets, no "I'll email the tech department and let them know". They pursue business customers (but still treat their consumer customers as old friends), because of the much higher margins, and they know many of their clients by name (or they keep a database so at least they know of all of the old problems and complaints and issues the client has had).
As has been mentioned, small towns are still ripe for entry by ISPs. Even in the US. Several of our customers are doing great, and they are still the only ISP in their given market. The ones who are seeing competition are staying ahead of the curve by offering business and consumer wireless web service (the last great frontier of the ISP world--read some wireless ISP mailing lists for a really fun bunch of folks--erecting towers without licenses, installing broadband in the most bizarre places you can imagine, and overall working together in a beautiful coopetition banding together against the Bell's). Wireless broadband is very cool in that if you really want to, you can push as much as 11Mbits (usually only 2Mbits, however) across town.
And of course, I also think a good web cache is a great idea for a small ISP. Bigger ISPs may have bandwidth and money to burn, but the little guy has to save where he can--and provide better service to boot. The original post asked for prices...starts at $1500 for a build it yourself box running Squid--here's the directions:
http://www.swelltech.com/pengies/joe/squidtuneup/t 1.html
Or you can buy one from us or other, proprietary vendors. Our Squid based appliances start at just under $2k to support up to two T1 lines, and there are quite a few other caching vendors who are quite happy to work with small ISPs. Stratacache is a Volera-based vendor that has some low-end options. The company seems to be run by good people, so is also a good choice if you don't mind a proprietary solution.
These days, most ISPs are the ILEC or a subset of the telecommunications industry. They can use telecom to subsidize their ISP business. Basically, their cost of operation will always be less than yours. So, unless you are in a very underserved market, its not worth it.
K
------------
Althea, a stable IMAP e-mail client -- how Evolution should have started.
Having worked at one of the local providers here, I can tell you the secret to not going belly up is to sell incoming and outgoing bandwidth. Sprint and MCI know that, and thats one of the reasons its hard for ma and pa ISPs to make it. You have to sell your upstream to hosting people and your downstream to DSL/Cable/Dialup customers. You can't really do well hosting just one or the other. In fact, a lot of dedicated hosting people get their bandwidth from ISPs that have more downstream users than upstream hosting needs because those ISPs can afford to sell their upstream because they don't need it and they are almost making a profit selling connectivity. So you see, its a sort of symbiotic relationship... If you can ensure a good hosting market and a good dialup market, then you're much less likely to go belly-up. W
You may still be able to get a capped OnRamp Express from Telstra but that'll cost $999/month.
Telstra's been changing the rules of the game again and redirectors have become a lot more difficult to have installed in towns nearby.
The main cost is the per meg charging where its actually cheaper now to send bandwidth from a capital city to the US than it is to send it to your rural ISP.
You can investigate wireless but there are restrictions on it for which you'll need a telco carriers licence.
Lurk on the OZ-ISP list for a while and get a feel of how other people are doing.
---
---
Silence is consent.
If they're so bad, and you feel you can do better, maybe you should try to get a job there? At least that way you don't have to put up any capital, unless you want to.
There are several companies to whom you can farm out your dial up service to. They even take care of all the tech support for you which is by far the biggest pain in the ass. You get charged about $10/per customer to use their phone lines and tech support droids. That way you only have to worry about a pipe for your servers and high speed bandwidth (DSL/Cable) start up costs [which can be substantial]. Technically you could run your whole operation off of one box (I used to know of a small shop that did so years ago) although I wouldn't recommend it. When it comes to your servers think redundancy, redundancy redundancy! It's going to be tough for the little guy just starting out but there are areas that are more rural areas that are under serviced or have no service at all by the big boys. This would be your best bet I think. Signing up companies for domain and web site hosting should be your cash cow. The dial up folks won't make you rich but companies you get signed up should help alot. Have fun!!!
G. Washington on Government "it is force. Like fire, it is a dangerous servant and a fearful master."
is colleges and universities and libraries and schools. more to the point, state-owned ones which have to follow a certain procedure of taking bids on all projects. what you pitch them: wireless LANs in their schools/buildings. you install all the hardware and set up their main broadband connection (to a 3rd party supplier at first, then when you have the money to provide it yourself, connect to yourself). i think there is a big market for stuff like this. another market for setting up wireless LANs such as this is apartment complexes. anyway, good luck, but as a warning every 'mom and pop' isp eventually either stops growing or gets eaten (by the market or by a competitor).
The REAL sam_at_caveman_dot_org is user ID 13833.
Nowadays, dial is pretty much dying. You'd need to provide cable internet, which would probably mean that you need a cable company first. The other alternative is DSL, of course, but then your customers need to get DSL lines from the local telco, and you need to hook your network into the telco infrastructure as well. Since most telco's (at least my experience) run ISP's over their DSL lines as well, you'll probably find it hard to compete for price against them as well.
Okay, so on to what you would need. Customer management, hardware to run your services (e-mail, news, authentication, etc.) off of, lease some POP's (point of presence) since I'm assuming you aren't a telco either, and don't forget contracting out a vendor for customer support (unless you want to do it yourself). There's more, but I'm not going to do all your work for you, I'm just trying to make a point.
It's a tough industry. You'd almost be better off starting a company and reselling local and long distance services first (CLEC) then going off and creating a ISP off of that and hope to win the competetive ISP battle.
Sorry to rain on your parade...
-- A computer without COBOL and Fortran is like a piece of chocolate cake without ketchup and mustard
Design web sites, offer online shopping or otherwise provide a service that customers need hosting for, and then you will have your customer base.
Too easy.
http://pcblues.com - Digits and Wood
I don't know if this could work, but contact a prominent (but still small) ISP not in the area and see if you could franchise. They would be able to offer you their brand name, experience and maybe some equipment, and you still get to run your own business. Sure you don't own the company, but at least you would get a share of the profits and have someone to fall back on if need be.
First off, it's very expensive. Depending on whom you decide to use for equipment, don't expect to spend any less than 25,000 solely for dial-in equipment. Don't forget that you can buy more equiment as you grow, so don't go too overboard with startup.
Second, you will NOT survive on providing dial-up alone. When we were up running at full capacity, we were actually losing $1 per port when charging 19.95 / mo. Make sure you have some income from web development / hosting as well, or you will have a hard time making it.
consider having support from the community. Investigate a co-op or other solution where the community has a larger stake in the success of the company instead of trying to just be anohter business out there.
PRI lines, T1 (or better) line, etc are very very expensive. Investigate options for bandwith. Check to see if you can find a DSL provider that will let you re-sell thier dsl links as multiple-user dial in links. The $300+ a month you spend doing that for a DSL link with 1.55 Mbps is far cheaper than a 1.55 Mbps T1 that will cost you 1200 / mo for the line and then 350 local loop charges.
Unfortuantely you are basically stuck paying whatever the local telco wants you to pay for PRI's or channelized T1 service.
Another good rule of thumb is "10% of your users will utilitize 90% of your resources". This a far more true than anyone would like to beleive. We had users that would be logged into the system 24/7/365 and we couldn't charge them a dime over the $19.95 since we were advertising "unlimited hours".
Make sure people pay you. Get a good collection agency and don't let people go too long without paying. It will just kill you faster than anything.
Stay away from leases if at all possible!
Things you should be familiar with: Linux
-- How to configure and optimize your kernel
-- How to setup mail, dns, reverse dns, www, news, virtual servers, virtual email, ftp accounts, suspending/deleting users, radius, postgres, mysql
-- Reading logs
-- Maintinence
Programming:
-- C/C++ experience. Writing little programs for customers or yourself can make/save a TON of money.
-- cgi languages (c, c++, perl, php, etc) Small web scripts for your customers can be sold for a lot of money.
-- HTML, DHTML, other web languages
Feel free to mail me if any of you are intrested in prusuing this. I've got a lot more to say that I'm will to write here, and if you have specific questions, I'd be more than happy to address them.
-- Ian
I would have loved to start an ISP in Australia. Unfortunatly I do not have the money to go into such a venture. I have priced a Webhosting company here in the states and it is very cheap, however I am not quite sure on the return value. I have worked for quite a few startup ISPs in my lifetime and they seem to start out with very little money. Usually just enough money to get it going the first month with other jobs to pay for it while it is starting up. I have seen one start to turn up some profit in the first two months. BTW: looking for employees yet? :)
In 2-3 years, small ISP's will be dead. It'll follow the same path that automakers. When cars first became popular, there were dozens of auto manufacturers, now there are only a handful of major players in each country. The same is happening to ISPs.
D
Mad Scientists with too much time on thier hands
The first, last, and only tech news site on the net
I recently jumped from a string of food retail jobs to (at last!) a Real Computer Job as tech support at a small ISP. I finally made the jump after getting absolutely sick and tired of having to deal with customers all the time; I was getting quite bitter and jaded. Now, I'm working in a tech job, it's cool neat and fun, but there's still the customer service part. It's a lot less than my old jobs, and there's a lot of other things about this job I really like that more than make up for it, but it's still there and it's still a significant part.
The place I work at has a POP in a nearby city with a huge community of retirees -- and believe me, nothing taxes your (or at least my) patience more than having to deal with someone who a) is the biggest newbie ever, b) has slow, slow reflexes, and c) can't much see the screen to start with. I realize that's more than a little cruel on my part, but it's part of the job...and how are you going to handle it? Does it not bother you all that much, or (like me) are you going to want to reach out and strangle them? Can you keep your temper while telling someone for the nth time that, yes, you click twice to double-click, and the Networking icon really is there?
Fortunately these calls aren't the majority, or I'd really go crazy. And they're a good 90 minute drive away, so it's not like I'll see them at the grocery store. But it sounds like you're talking about a pretty small town -- how are you going to deal with that?
Carousel is a lie!
Enjoy your bankruptcy.
Why is this Informative? Why do people start flaming without bothering to check the article?
He clearly states it's countryside Australia he's targeting, and there's only one other ISP to compete; plus, people hate the other guys, so an alternative will be more than welcome.
I have no .sig
Tuff that Smatters.
Well, the rummor is, if you have ALOT of money you can make a little.
I've participated in the launch and operation of a couple of rapidly growing ISPs over the years. One thing that we _really_ had problems with was getting more dialup lines when we needed them. Sometimes, we had to wait up to three months to get a few additional lines while our users screamed. Also, the potential competitor you mentioned may be experiencing lots of disconnects because of bad phone service, and you might wind up having the same problem.
In my experience, it is absolutely essential to establish excellent rapport with your telco. You should be on a shoot-the-shit basis with at least one human being there who can push your orders through, and resolve other issues.
Beyond that, get modems that can cycle themselves when they get hung. It's no fun going in to cycle hung modems at all hours. And, you should know that dialup is the least fun end of the business (compared to hosting and development); I wholeheartedly agree with the other posters who recommend outsourcing if you can.
Good luck!
--
--
Socrates was asked where he was from. He replied not "Athens," but "The world."
I have done this ... I have built an ISP from the ground up here in Australia and it is profitable - How did I do it? Simple ... I kept the basic principles of business in mind and have keep overheads low and budgeted where possible to work within my means.
Having said this, I can still say though that the number one asset which you can take into this business venture is knowledge. I came to set up my ISP venture after having spent time working for a larger, second tier Internet provider where I had the title of System Administrator. In this role I gained a great deal of information and knowledge in the organisation and administration of an Internet service provider - This in short was invaluable. This knowledge allowed me to set up and configure my own servers, dial-in routers and customer billing systems - I even designed the first web page myself! (and man was it ugly).
I will not say that there wasn't a lot of work involved - but it did allow me to set up an ISP that runs on a profit for minimal outlay.
Being in the business myself and at that point of small, but marginally profitable ... I must say this is an excellent summary of how it has to be done.
:)
If I hadn't already posted I would be +1-ing informative
The one major thing you need when starting out as an ISP is cash flow.
We opened doors as a service provider just over a year ago. We do all the normal dialup stuff and we can resell DSL in areas that have is available. We get our main cash flow through server collocation and admin. We do Corperate E-mail and web hosting. These are the more Profitable ISP services. If you can offer a god degree of security and find a local computer comapny that will give you a good deal on systems you can sell linux or BSD servers and host them for a pretty good profit. You are already the admin for your own servers, keeping na couple more running is almost no work at all. It is much easier to deal with the hassles of running a dialup ISP and keeping you servers and equiptment running when your checking account has a positive ballance.
Running an ISP isn't difficult once you learn the systems you need to run it. The hard part is keeping the bills paid.
Perhaps this "Ask Slashdot" question has been stuck in the queue since 1991? The small ISP biz is dead, in case you haven't been reading the papers.
~~ What's stopping you?
bandwidth.
--aiee
The market for internet assess (dialup... cable /DSL is a whole different game)is very close to the microeconomic concept of 'pure competition;' that is, there are few barriers to entry, little product discrimination, and many sellers. Because of this, it is impossible for an ISP to earn anything other than zero economic profits (basically, the value of what you would have made if you had invested the money in the bank) in the long run. The exceptions to this are when there is product differentiation (read: good service, shell accounts, etc) or geographic factors (the only ISP in town...) the consumer benefits from this, as costs of production are minimized. on the other hand, few producers are interested in normal economic profits
My point is that being an ISP is a BUSINESS, not a tech job. Trained monkeys can (almost) do the tech work, especially now that things are SOOOO easy. Hopefully, you can get funding and business people on board to run it. Business concerns are primary, tech concerns are either secondary (or even tertiary). And, hopefully your local telco or other local ISP's aren't better at running an ISP business than you are, or they'll kill you off....
Nope, as one who has lost major money, it isn't worth it....
Small ISPs must do more than internet service to survive. Depending on the market, the business is in a one-stop shop, some place businesses can go for EVERYTHING, networking, computers, web design, internet service, everything. With this business model, you are more likely to succeed. The money is in the business market, but if you can't provide broadband to your business customers, then you won't have many. There are smaller business that still use dial-up, (especially in small town markets). Cable doesn't really count here, since it's not really desirable for most business use. At the very least, you have to do ISDN, which would involve having all or some of your modem pool be ISDN primes. Unfortunately, with this same business model, you must have the people who can DO all of these things, and people to support them. Tech support is always the worst ongoing problem.
I know a guy who lives in the country in the states and they have connection/bandwidth problems but the problems for the most part are all phone company related. The phone company instead of replacing the rotary phone equipment with touchtone equipment just added equipment to the central office that makes the touchtone work over the rotary system. Make pretty much any big downloads impossible.
Also in the country you have to worry more about electrical interfence and surges along the phonelines.
Codeguy
ignoring the fact that we are talking about australia an a totally different market... starting a dialup based ISP now is like starting a pay for BBS at the start of the "information superhighway" (yech, what a miserable piece of jargon)
*Shrug*
Sorry can't be more helpful than that, I just wanted to hear myself type... there were some much better posts by seemingly knowledgeable people, read those instead =P
E.
Build Your Own PVR/HTPC news, reviews, &
There are several 'community' based wireless services starting up in Australia already although it looks like they're expanding quite slowly and without any real high-speed backbone access. :-)
http://www.x.net.au
is a good example of such a service in Melbourne, they are mainly concentrating on the Mornington Peninsula but I've been enquiring about connecting with them from the other side of PH Bay, actually an inner suburb without any high bandwidth access apart from satellite, and it's looking quite promising
Their site has some good links to other services interstate and they can sell you the gear you need with fairly limited (due to the relatively non-profit nature of the project) yet concise tech support.
I think the initial aim of the project was to get people to share their cable modems and DSL connections with the wireless users who cannot get such services and share the cost, shafting that most greedy and insidious of share-price blinded Australian companies, Telstra.
They were origionally talking about having a highbandwith connection that was payed for at wholesale rates (13-15c per MB down here!), which would end up being quite costly at the end of each month for the average user who has no idea what the bandwidth cost is for most of the stuff they download.
I predict that dialup internet access will be nonexistant within the next 5 to 10 years. More and more non-techies are getting high-speed access because it is affordable and basically makes the internet significantly more useful than it is with a modem. The cost for this type of access is falling steadily and availability is increasing.
DSL will likely not survive either, unless the limitations on distance from the CO, and general issues with the physics of forcing a lot of data down a piece of copper. If it does live on as a viable access method, it will only be with the RBOCs (ie Verizon, Pac Bell, etc etc).
So what I'm saying is that in my opinion, starting your own business as an internet access provider is probably not going to lead you to success. High speed access is the future, and it's not the kind of thing that your average entrepreneur can break into.
-- Have you ever noticed that at trade shows, Microsoft is always the company that is handing out stress balls?
I'm in a similar situation. Australia has lots of rural areas, I'm sure. Are you looking at providing service in a rural market? I work for the largest ISP in this area, and we're not that big at all. 5 employees. The telco situation here prevents us from even providing ISDN, and DSL is completely out of the question. We have recently deployed a wireless network, and we're doing quite well. People are banging the door down for broadband :)
Above all though, to be successful, you need the best customer service. People are tired of major companies' crappy access and lack of good customer support. The company I work for is founded on good customer service. Our customers pay for it and expect it.
Abstainer: a weak person who yields to the temptation of denying himself a pleasure.
Abstainer: a weak person who yields to the temptation of denying himself a pleasure.
--Ambrose Bierce
resale!
disconnects are most likely just phone line issues (but that's been talked about already)
the way things are today resale is the way to go. rather than you buying up data pipes, servers, dialup boxes, etc... you can get it wholesale from someone else and make a profit! companies have been doing this in the states for phone service for a while now. the company i work for now (T1 provider in the SE US) got started by reselling BellSouth local phone service cheaper than BellSouth sold directly to customers. over time we got big enough to have our own facilities (phone switches, routers, DACS, etc) and now we just lease unbundled loops from Bell.
resale is more a business venture than a tech venture, it's at least somthing to think about tho.
Silly slashdot, sigs are for kids!
I'm on hold now with MegaPath to troubleshoot some connection problems... I've been on hold for more than an hour. Thank god for speakerphone.
"To stay awake all night adds a day to your life" - Stilgar | eMT.
Billing and Subcriber Management
Customer Relationship Managment (CRM)
Provisioining (may not apply for simple dial up)
Network Element Management.
You must examine, after the business plan, what software will fit into the above puzzle. I saw a 42 million dollar ASP go under because they could not automate the OSS. Adding new clients, setting up the billing, taking care of their problems all these were manual steps and cost them business. People cost more than software. These components must be addressed in your business plan, even if you only plan to use quick books and a telephone.
Another area: Business Process. How do you sign up new customers, how do you handle complaints...how do you....I think you get my idea. Do the BP then design the OSS.
Good Luck steve
"It's technical in a psychometric kind a way" -- C. Parish
Where do I report the fact that their site has been slashdotted???
*** I am the real stylewagon
Just like to thank everyone so far... a run down of the points so far are
- Think about a no-tech support option.
- What about broadband?
- Allow for 20-30% of your users to connect at one time!
- If possible, get someone else to handle accounting, networking etc...
I think some more info should be added here. Things left out were the fact that i have a degree in computing and have been programming for 12 months now. I have about 4 friends that graduated with me that i would ask to join me in this business venture, one is perfect for doing the networking as he did a major in networking, and another was setting up unix systems since before he was born, so he'd be great for setting up mail/web servers etc. The tech support is as you say, an option, but another friend who graduated has been doing tech support for a year now, so no problem there.
I think the big issue ive realised after reading through all these this morning is the broadband one. I realise no one is paying for dial up anymore, everyone wants to purchase broadband, and i guess it's something i'll have to look into for sure. But i mean, if we could get about 3 or 4 hundred customers paying for the dial up service would it cover the setup costs eventually?
Kids, you tried your best and you failed miserably. The lesson is, never try. -- Homer J. Simpson
This is a very valid point, geez who mod's these? here i am going through looking for scores over 3 because they will most likely help me the most, and i am at work so no time to view ALL posts, but i am trying...
anyway, i like the point here aboutISP's generating good revenue from setting up website's and basic DB development. this is something i would definately do, and even think about doing just this and scrap the whole isp thing...
if we were to charge for website hosting and database/website development, how much are we talking here? all i'd need is one or two servers, web/mail server and optional database server, if light load it can be same server, then housing this somewhere with permanent bandwidth... hmmm, interesting *scratches chin*...
Kids, you tried your best and you failed miserably. The lesson is, never try. -- Homer J. Simpson
or you can buy the hardware and run it yourself. That would be more fun, but the economies of scale are all against you.
:)
If i do the web hosting business i wanna own/admin the server myself, i am quite capable, all i need is somewhere to house it, but not sure how much that costs!
you'll find yourself using your shiney new server farm for nothing but reading slashdot all day, waiting for the phone to ring.
That's cool, i do that now anyway, but atleast i'm getting paid for it.
Kids, you tried your best and you failed miserably. The lesson is, never try. -- Homer J. Simpson
1) Get your finances straight first. The ISP I worked for made enough to cover costs, and a little bit of profit, but it never really made enough to repay the startup capital. I was making $7/hr in high school doing this. We only had a part-time non-tech manager for a while, and then they hired a guy for about $30,000/year to manage the business. We tech guys then asked for a raise, and were promptly told there was no budget for it. It created resentment for the manager quickly.
2) Know you're new archnemisis, the Telco. Being in a rural area, the telco probably won't have the equipment you need installed. They will want to charge you to get it installed. They will create artificially long delays. You may be dealing with an "engineer" that spends most of his/her days punching down lines at local residences. I'm not slamming Telco people by any means, I just want to let you know you're going to have to work to get what you want. If you don't know what you want, you could be in trouble.
3) Try to go with channelized T1's for your access. It may seem like individual dialup lines make upgrading easier, but it becomes a nightmare. We started with 16 Hayes modems in some sort of rack. Then, from 24-64 modems, we used Shiva modem racks (way, way, way too expensive). After we got to that point, we started buying USR Total Control racks. 2 Channelized T1's and 12 modem cards later, our users were very happy. You take out the extra D to A conversion in there, and it helps your line performance. It could make a big difference in a rural area with poor phone quality.
4) Like what you do. Do you enjoy this type of work? If you don't like long hours, sometimes unpleasant users (some are great, but some made me answer the phone with a different name), and tinkering with things to get them to work, don't do it.
5) Don't piss off your techies. If they are people that pass number 4, they probably don't need a lot to keep them happy. Let them use the office after hours to game, surf, research, whatever. Let them have LAN parties with their friends. The guy that owned the ISP I worked for was an old Army guy. He had a mentality that the highest ranking person was always right, and that everyone needed to do exactly what he said. That being said, he had no idea how to run an ISP. We would get into heated arguments about the way things should be run (technically, not financially). If you trust your techies enough to maintain your servers, listen to their input. Even if you don't do what they recommend, listening my help the situation.
That's about it. Reply or email if you want more specifics about my experience.
Still, with a plan, you only get the best you can imagine. I'd always hoped for something better than that. -CP
2. Inside connection with a major phone company or cable company so you can sell your customers over to them for a profit before they steal them
I've been there, done that... Also, if you find venture capital, make sure they DON'T use AOL and they know what the Internet is. My bankroll was completely clueless when they paid my way to developing an ISP in '96 and pulled out 9 months later after not realizing (despite many explanations) what the Internet is good for and why anybody would use it.
You should start a car company, it's probably a less crowded market...
JP
--- Worst tagline ever.
Note that Earthlink had an operating loss of $395 million on revenue of $987 million in 2000. Reported revenue per narrowband (ie. telephone access) customer was a little more than $16/month - probably due to customer churn and the free month of service. Operating expenses per narrowband customer were (educated guess) about $22/month.
Also, the $12/month for a telephone line - is that a residential line? Residential lines are typically subsidized by business lines. If it's a business line you're talking about, then either you're in a cheap jurisdiction or prices have fallen quite a bit in the last few years. Either is possible, but Earthlink's financials seem to support my crack-addled comments.
Milo
The costs can be broken down in a few categories: - equipment (modems, authentication and proxy server, ups, etc.)
- telecomm (telephone lines in, T1 out)
- upstream ISP costs (the T1 has to go somewhere)
- marketing (you're pressing millions of CDs right now, aren't you?)
- labor.
For a large ISP, the non-marketing costs are typically about $10/month per user and the amortized marketing costs are about $11-$15/month per user. Revenue is usually about $20/month per user.
The largest non-marketing cost (on a monthly basis) is the telephone lines in. In the US a line in is about $20/month (depends on locale of course). One of the advantages of scale is that you can more accurately predict your likely usage. Assume, if you are not big, that your peak usage is 50%, so you need one line (and modem) for every two subscribers. This will probably still get you less than raves from your customers because the probability of not getting a dial tone is high (big ISPs shoot for a p95 or higher.)
Marketing costs have been high in the industry because most ISP subscribers do not stay long at any one provider. So, after spending $100 or so to sign one up, the subscriber stays 7-12 months on average (plus, add in a free month of service to the "marketing" cost.)
Hopefully knowing this you can avoid some of these problems. Good luck.
Milo
Hmm a limited (downtown only???) wireless ISP would rock, and would probably be your best bet for leapfroging the established players, as even in Cable/DSL there are some very large players, but wireless is still untapped(for the most part)
I'd do something interesting, but my server can't handle a slashdotting.
Start with a large fortune.
include $sig;
1;
I say kinda, cuz we don't actually provide our customers with the dial up. We buy accounts from a 2nd party provider (who get there's from the big boys, i.e. megapop/uunet) for $8 and we sell them to our customers for $19.95. We host e-mail, webpages and whatnot all in house. If our provider didn't suck too much we'd have alot more customers.
I am currently not obliged to divulge that information as it might compromise the agents in the field
Maybe this is just the idealistic engineer in me talking but how about designing the telephony equipment from scratch. There might be enough interest among those in - and out of - the open source community to develop hardware to achieve just this. If the cost is substantially reduced while giving a higher control over the functionality of the equipment maybe this is what could help the little ISPs to stay in business. Or for new ones to start up.
It would also inherent some of the better qualities from open source software: many eyes reviewing the designs, bug fixes to any design flaws, inspiration towards the designs, integration of ideas into other designs, and so forth.
As for the cost, I don't know what the price on outsourcing the boards would be, maybe someone with experience can offer some assistance here. The PCBs would run about $500, at least that was what it cost us at the my last job. I don't know about populating the board.
There is an Open ISP group working on the software end, http://open-isp.linuxbe.org/, maybe a hardware solution in conjuction with them could prove to be useful. OpenH, would be a good place to organize the project. And I would offer any engineering help that I could to the project.
And just how is he supposed to get this past the FCC? (or whatever they have that is like the fcc)
Do the research, if you find something viable that can be used in the US for a "little guy" to offer wireless internet on, then let me know. I have yet to find it.
-
I've had enough abrasive sigs. Kittens are cute and fuzzy.
if startup capital is limited, I would say you look into re-selling the higher end service (DSL, dedicated circuits etc) from the local telco. I'm not sure about the climate in Australia, but becoming an agent here (USA) can be worthwhile. If you are in a higher density area, look into cutting deals with local apartment complexes as well......
Service guarantees Citizenship! Questions Guarantee GITMO.... Amerika Uber Alles!
Charge a nominal monthly rate for the first three. Lump the other two into your monthly cost. Of course you must have automated credit card billing.
Offer 24/7 toll-free tech support. Keep the call center well-staffed and don't punish/reward the support staff based on how long it takes to complete a call. Integrate the web and email support services. Setup a support evaluation survey that gives people points towards freebies if they complete the survey. Track this info like all hell. That costs a lot, obviously, but it'll be a very good selling point.
Your advantage over the Big Guys will come from offering services they don't offer at comparable rates with friendly, effective technical support. There's not much else to an ISP.
Oh yeah, game servers, irc servers, news servers.
Also consider the adverts you are going to run. Are you serious enough to get local TV ads or will word of mouth suffice? If the area is small enough and you only want to provide service to that area (i.e., you DON'T want your business to grow and spread out), then word of mouth and perhaps some radio ads might do the trick. Advertising IS important!
Check out Althea for a stable IMAP email client for X. Now with SSL!
I'd think that starting a small ISP nowadays would be likened to committing seppuku, but if you're still interested, you should try to build a loyal customer base that will be valuable when the big fish come to buy you out.
--The space between my ears was intentionally left blank--
Dunno about Australia, but in the UK there are several companies that will set you up as a virtual ISP. You provide a Radius server to do authentication, and a mail/web server, they provide backbone internet connection, space, electricity, and modem racks. This cuts down on the maintenance for a small ISP severely, but will reduce your flexibility. An example is UK Linux, whose servers run from the WorldOnline (formerly Telinco) premises.
exactly. Get a "support lackey" for $5/hour. Why would you want a network guy doing help desk anyway?
Don't do it. Dial up will be history in 5 years. Its allready tapped out at 56K.
At work we have an ISP that has run fiber into the building and sells the different company's access based on bandwidth. We currently have a full 3 meg pipe for less than 1k a month. they even offer pipes up to 100 meg. Something to look into.
Can Smeg!!! Will Smeg!!!
This is true for the municipal areas, but you can
still do quite well in many rural areas; as they
develop, you might even be lucky enough to get
bought out.
C//
Get your main broadband taken care of, get an antennae on a radio tower or three, and offer wireless internet to your community.
I can't think of why this wouldn't sell, especially if you live in a college town. Offer the service to 'internet cafes', and give them an address block. It should sell decently enough to pay off.
The ISP my server is colocated at is, in the Middle of Nowhere, MN. It's the only game in the area. AOL dosen't even have a POP in this area. If AOL did move in, new business would dry up, and current users might gradually move to AOL. But for now, things just run with minimum staff, minimum breakage, and manage to turn a modest profit.
Location, location, location...
I'm going to go back in my box and will think within the limits of my box: MS Sucks Linux Good I read too much Slashdot.
I currently work as a networking professional at a growing financial institution, but before I worked at an ISP in texas. I spent quite a while in the support room.
Like any support department, it was fairly dead-end. You either learned-out or burned out. Despite this fact, life was fairly problematic in our particular department.
We had a saying that we were the red-headed bastard children of the organization. This was because we were at the bottom of the barrell. We always got the hand-me-down PC's, poorest, least usable office furniture, and what 'comfort' equipment such as microwave ovens, coffee machines and such from the other office that was broken, and could be 'written off' before we jury-rigged it back into operation.
We made less than the receptionist and the phone-billing jockies despite the fact that we could do their jobs but there was no way in hell they could do ours. We frequently did odd-job coding and repair work for the entire company, yet the head bean-counter repeated suggested eliminating our department and out-sourcing support because we generated no revenue. Our meager wages were a black hole of finance that made the company's bottom line look bad.
What the accountant didn't realize and what the company apparently still doesn't realize can be found with a simple 'like' query on the support-tracking database. Why do most customers sign up for our ISP service? We have superior support. Why do most customers quit our service for another ISP? They felt like they got poor tech support.
What you discover working in tech support for an ISP, is that you are the only real difference between your ISP and others. What our manager knew and what we knew was that there was a correspondance between customer churn-rate and how happy the support staff was. The week that our gaming privaleges were revoked, we lost more customers than the week we got them back. Of course our personal problems weren't supposed to carry over ot the phones, but mood does indeed matter. If we got more ram or newer processors, and could open unfamiliar applications more quickly, our customers felt like they were getting faster, better treatment.
One of our most successful techs was the guy who regularly brought his own cherried-out PC to work to play games. He did all his support work on his own box, and was able to do it quicker, better, and usually made the customer happier than when the rest of us tried to do the same thing on our hand-me-downs.
The bottom line is that you can't afford not to have a quality support department, and that means keeping your support staff happy. That doesn't necessarily mean allowing gaming at work, but it does mean new machines, comfortable office furniture and nice accoutrements such as a refigerator, coffee-bar, and a kitchen of some sort. Don't spoil your support staff, but they're just like the transmission in your car. Sure, it's the engine that does all of the work, but you'll be sorry when your gearbox goes out. Treat it well, and it will treat you well.
The next Slashdot story will be ready soon, but subscribers can beat the rush and slashdot the links early!
AOL (for all its truly bogus deficiencies) is a fine example - besides web, mail, and Usenet access, they provide an enclosed, relatively easy-to-use interface, built-in content filtering, and a host of other services that your average family users would want. For this, they get to charge quite a premium (something like US$22 - don't know what it would be in Oz).
Attempting to compete in AOL's space would be foolhardy, but you could follow their example and pick some underserved segment of the population and give them the features they want. One idea: serve up a geek-friendly service. The Internet has been dumbed down so much that those who would like things like a full NNTP feed or shell access have trouble finding it with the right combination of reliability and price.
I say, look at what the Internet isn't doing well right now, pick a niche you're competent to serve, and hope for the best.
OK,
- B
--
http://www.bradheintz.com/
- updated
Reminds me of the definition of a strip club in the glossary from alt.sex.strip-clubs: "something you do not want to own."
If you can't beat them, embrace and extend them.
If there really is only one competitor and they suck, it should be easy for you. You'll need to have some idea of what kind of capacity to start with. Depending on whether e1 or t1 is the norm there, you could run several of those into something cheap like a Livingston pm3, 2 circuits per box. Each t1 ckt would give you 23 usable dialup lines, you could use multichassis ppp to span the same access number across all of em. Have you thought at all about other access methods, or just dialup? Also Cisco access servers, like the 5300 could probably do this. You could use linux for radius, mail, web, and whatever other servers, perhaps offer a dialup acct + small web page as a package.
Where do you want to be, What are you doing to get there.
Don't tie your service to proprietary software, to a particular OS, run stable servers, and be really friendly to everyone. And webspace... we all love webspace. And don't block out the POP3 port (110) so that we have to use -your- mail servers. And don't be like anyone that sucks.
samrolken
My advice is to not do it. I realize that the Australian ISP scene may be different than in the US. With that said, it's still the business of high costs and low margins. Period. It's a bad business to get rich on. If you just want to do something for the betterment of humanity, you'd reach more people by donating to charity. The number one priority of the ISP's is servicing people who are completely computer illiterate. Everyone else has an connection by now. Do you really want to be the guy responsible for hiring a massive support staff? I could go on for pages why that is a bad idea, but I won't. Think of the logistics, how much money you'll bring in for rural areas, and how much will be spent on Antacid tablets for your upset stomach.
My reply may be philosophical, but it's a very important one to consider-- is this really what you want to do with your life?
"Politicians find new names for institutions which under old names have become odious to the people."
Good support people can keep most of your customers happy even when the equipment is in the server room smoking (or at least convince the customers to give you time to fix things before quiting), while bad support techs will drive away customers even when everything is working just fine.
The drawback to this is truely good customer support people are as hard or harder to find than really good engineers. The support people have to be reasonably good with the technical details and be able to deal with the customer contact day after day.
Disclaimer: I'm a support tech and have worked for an ISP that treated their customers well, and one that treated their customers as totals in the accounting books and nothing more. It makes a difference.
Just say no. Sigs are bad for your health.
where i live, all the local internet companies are struggling to stay alive. With the high speed internet being offered by DSL and CABLE, the only reason the little guys have held on was because they had been around for a while and built up a fairly large customer group based on their dial in access. Now with the big compaines moving in to sell the high speed, the only thing the little guys can do is re-sell the big companies services. And it just dosn't seem to be working out right now. The one thing that the little guys are starting to look into is the wireless technology. That seems to be their only way out of this situation. But they still dont know how its going to turn out. Ah well... i guess what im trying to say is don't bother with it.
Just don't read it then. All these replies interested me, so maybe you should open your mind a little and realize others might be interested also, even though you are not.
I think the disconnections problems are due to the bad quality of phones lines and that you might also have them...
sourceforge project openisp
/radius/bind/apache/sendmail8.9/proftpd etc etc etc...
See openisp.net also.
Automates
Good luck and may G.. help you...
If there's one thing I've learned about ISPs, it's that the best way to get a lot of high tech users on your line is to make it free. People who don't pay for things always know what they're doing and never complain about your service. Honest.
Hey freaks: now you're ju
There are two ways of setting up as an ISP. The 'real' isp way means buying a pipe to telstra (ISDN/Frame Relay), and a port concentrator (or just a bunch of modems hanging of a linux box) plus at least one box running mail & RADIUS. Apart from the hardware, your costs will be about $300/month to lease a 64k ISDN line (this is for a metro link, could go up to $900/month for rural areas) plus 18c/MB of traffic downloaded by your users. Then you need about $25/month for each inbound line.
Budget ISP's can often get away with 10 inbound lines sharing a single 64K uplink.
As you can see, there are some pretty high fixed costs, so you need to have a reasonable number of users to amortise those costs over. And even then the margins are pretty slim.
An alternative is to become a 'virtual' ISP. This means going to a company like Vivanet (www.vivanet.com.au) or PSINet who allready have a POP in your area. You then pay around $100-$150/month for each modem channel. If you offer unlimited dialup accounts, you will probably need about 1 modem channel for each 8 accounts you sell. You still need to provide a RADIUS/Mail server somewhere. Hosting one of these boxes in a datacenter will be around $200-$500/month depending on the size of the box, how much traffic goes through it etc.
Re broadband, if telstra offers ADSL in your area, then any one of a number of wholesale ISP's (including VIVANet) will also let you resell ADSL there.
If you do the numbers you'll see there really isn't much money to be made selling bandwidth. But one factor I haven't mentioned is that for many small ISP's, selling bandwidth is not the primary profit maket. For Small businesses, their ISP often becomes their defacto IT department, so ISP's can generate good revenue from setting up LAN's, buildings website's, basic DB development etc.
That's true for the states (except possibly very rural areas), but what is the situation in Australia?
I work for a small wireless ISP. The cost of setting up wireless access to customers may be high as far as equipment is concerned, but it is transparent, easy to set up, and usually no software is required. Take a look at Cisco Aironet or Breezecom wireless bridges.
"Go, Lemmings, Go!"
I don't need to explain to you why, do I?
Your pizza just the way you ought to have it.
"Hi, a couple of my friends and I want to start a space program. None of us have ever really worked on space exploration, but we like really like Star Trek and the first few spinoff shows. We were hoping that maybe some people from the NASA community could help us out with some tips. . .what kinds of fuels and rockets should I use with my space program? Is there a GPS service that works in orbit as well? What were some snags you ran into when starting your space program? There are obvious things like astronauts, space suits, mission control centers, and flight computers, but we'd like to get a feel for how hard it might be to patch something together with open source alternatives. Also things like programming flight trajectories might be useful. I figured we might think about it ourselves for a few minutes and realize that if we have to ask these types of questions and don't know how to research them ourselves then we really shouldn't be getting into this business, but gosh darn it, we were sitting around drinking beer, and figure that it would be really cool!
Isn't there already a HOWTO on this?
It may not be true where you are or they may have changed, but I know as of a ocuple years ago the australian phone company charged by the MB for data transport. Make sure to ask about any other charges to avoid the hidden gotcha's that some phone companies have.
I started an ISP in 1994 and ran it through end of 1999.
Considering australia, where there is hardly any cable, all you really can provide is dial-in services (maybe DSL?)
I guess what you really need first is lots of money. All the major players now are huge companies that can afford expensive hardware, helpdesk etc etc. You won't be able to stir the pond unless you start off at a similar level as your competitors.
And then you should hope it won't end like the australian airlines. Here the government introduced a third airline (next to anzett and Quantas) to increase competition. All that happened was the release of a price war, the 'new' company went bankrupt a few time, and everything went back to 'normal'.
To avoid such a scenario, you realy need to point out to your customers you have something to offer. Don't try to be cheaper because you will most likely lose out
If an experiment works, something has gone wrong.
What are you offering that the competition is not? Who is your target market? What will make them choose you instead of a big ol isp? (for instance, in my hometown, someone set up a very successful mom and pop that offered shell accounts and targeted unix geeks and small businesses who wanted a unix web site)
-CrackElf
"Blake is an idealist, Jenna. He cannot afford to think." - Kerr Avon, Star One, Blakes 7
Enjoy your bankruptcy.
--
$ chown -R us:us yourbase
It's simple capitalism. Offer something the other guy can't. The ISP market is pretty much a commodity, where if you've dialed one, you've dialed them all. So, offer something they can't like a cheaper price, or on-site tech support (probably for the masochistic only), or perhaps what could be the coolest for a rural ISP, fixed wireless. You aren't going to make it via advertising fewer disconnects - rural phone lines would probably be improved if they used tin cans and a string. But you do need to set youself apart and get ready for 6-12 very tough months getting started; everybody loses money for the first .5-1 year.
If god had intended you to be naked, you would have been born that way.
Many posters have raised tech-support issues. I have one suggestion there; make friends with local computer stores. Get one who'll sign people up through their shopfront. I set up my parents-in-law with a connection this way not long ago (they live on the Murray River.) People new to internet connections are often more comfortable with seeing someone face-to-face, and handing papers over.
If you have the computer store onside, some of their sales will bring you new customers, and they'll field some of your tech-support issues. Or most, depending on your users and the deal you set up with them. They'll take care of some of your administration and advertising[1] :-) And some of your customers will buy from them next time ... but I imagine you'll be handing them a share of your subscription fees anyway. This works best, of course, if you already run a computer store, and are adding the ISP as a sideline; in which case the accounting is rather less of an issue.
Incidentally, you might be able to get the local council to help, if you pitch things right. Connecting remote communities is fashionable; internet terminals in libraries also; and the latter have a decent chance of attracting volunteer tech support. Part-time work for interested high-schoolers also goes down well.
Of course, if the problems associated with the first ISP really belong to the local phone-lines, you're not going to be able to do much better.
Rachel Butt
Australian National University
[1] I have it from an expert in marketing that the best advertising is to make the local news. Costs little more than your time, and reaches more than normal ads do. And getting an article into the newspaper is relatively easy if you put out a press-release that needs only a headline to become a newspaper article.
Consider this.. Provide Broadband access to multi home's such as apartments this can be done by running circuits to the location and placing your head end equipment at the location so.. if you wanted to provide DSL to a apartment community you would run out your T-1 or what ever to the community place something like a Lucent MAXDSL with two 16 port blades to start, a Xedia AP 450 (because it rocks at QOS) and a Cisco Cat 2924 to connect it all then you just need to punch down the extra pairs of utp going to the homes and boom you are providing DSL service.. You can do the same trick with cable service.. replace the DSLAM with a Nortel CMTS 5k and split off all the cable going to the apartments you will end up running in the 50-60db area.. If you REALLY want to get trick place a Nortel Shasta 5000 at your POP's to provider services like personal firewall etc.. you can also provide Wireless access if you want to.. Adaptive Broadband has about a five mile range for point to point microwave and its not very costly.. you can tie that in with cisco aeronet units to the homes these have (depending on objects in the path) a range of a few houndred yards. And dont forget to provide everything you want to be the 'one stop shop' Provide PC repair consulting shell accounts web hosting games etc.. Shasta 5k = ~$100k US Lucent Xedia AP 450 = ~$10k US Nortel CMTS 5k = ~$15k US Cisco Cat 2924 = ~$1500 US Lucent MAXDSL = ~$15k US Private Line = ~$1600/m US Look on backers face when you go belly up =Priceless If you do it right this CAN make money but if you do it wrong you will end up with a $4million US burn every MONTH. This would put you in the big time.. Dialup service costs to much. and for it to be worth anything you need to keep a 4/1 customer/modem ratio... Best of luck - DS
Real men don't use GUIs.
I see quite a few people saying "Oh, you can just get by with 1 old Linux box for all your web/mail/ftp, it's great!" :)
What happens when the hard drive fails? Or you have to take it offline to add RAM? If it gets hacked? People overlook backup systems. UPS systems. Tape backups. Redundancy!
Please, don't forget that kind of stuff. If you have to up your ante to "TWO SuSE boxes!" then do it.. but never put all your eggs in one basket with running your business on ONE machine, linux or not. You might as well sit there with a gun to your head.
Besides, Fry's isn't open 24/7.
To start a successful ISP you'll need a time machine that can transport you back 4-6 years. And going six years back might not even be enough. The biz is locked up now and the consolidation is in process. It's completely the wrong time to try to start one up. Unless you've got a source for cheap wholesale bandwidth and are way, way out in the hinterland somewhere that AOL, MSN, and Juno don't have a local number.
being a tech support lackey myself i know the importance of having skilled people on the phones. so you'll wana stay away from MCSEs when hiring support staff
***kgbFXzero***
AOL/TimeWarner
Like the Borg;
Gobbling this and that;
Start-up ISPs beware
Today in Australia would look to be equivalent to the US six years ago.
Tech support is going to be your pain in the ass. Try to do it by email or web, and then for the boy's who want you to install their modem for them over the phone, you setup a 900 number (like a dollar a minute), make them pay dearly for the privilage. That way you would make money out of the tech support side of things.
You could run your entire ISP setup off a 900 number. Run add's in the papers, "No subscription internet access", here's the number, login as "user" password is "password". Again it would pay you to run the service.
There is no long term advantage to that kind of setup, people will only use it when badly stuck.
A better plan of action would be to get setup with some venture capital that will carry you for 5 years. Run the service as a "free" service. Run your tech support off a 900 number. Build up a large customer base by giving out as many CD's as possible.
Where the money comes in.....
1) Tech Support, pull a few cables occasionaly to fund that new Lexus.
2) Advertising. If you're smart, your install wizard application will configure all the user's browsers homepages to be your website. Sell banner advertising.
3) Gather statistics, and play the local loop carrier game.
I can guarantee you that if you get a significantly large customer base that you will be bought out by a telecom company within 5 years, yielding you your retirement money.
The statistics that you want to try and gather is who's phone service does your clients use? If there is more than one carrier in your area, and the majoriy of your clients are on carrier A, then you gather the stats, you approach carrier B, and you formulate an agreement like this...
Line rental for diallin = A
Line rental for leased line trunks = B
Running costs per quarter = C
bigger lexus = D
Tell carrier b that if they pay you A+B+C+D+ another 100K per quarter, that you will switch your lines over to their service.
This is what the ISP game is all about nowadays. Telecom companies local loop interconnect fees.
If Joe redneck spends on average 5 mins on the phone a day, and then suddenly gets a webTv and now spends from 9pm till 3am surfing porn, then there is more money to be made from an interconnect fee to carrier B's network than there is revenue to carrier A for having joe redneck as a client.
Watch out for new telco's on the local scene, they are hungry for revenues, and will pay large sums for guaranteed interconnect fees.
Once you sell the "interconnect" benefit to the telco's you will be guaranteed a new lexus every quarter, and can use the revenues from the 900 number tech support to fuel it.
Pretty soon the telco's will get tired of paying you the quarterly fee, and will make you a brown paper envelope personal donation, along with a proper business buyout deal. This will be enough to retire on, and you can spend the rest of your days cleaning and polishing the extensive collection of lexus's in your back garden.
Somthing that would be pretty cool to work on "in the bush" of Australia, would be to take the bush telegraph to the net scene. Provide internet via packet radio. Probably work out too expensive. But it would be cool.
Anyway, best of luck, you can do it, and dont listen to the knockers, they couldnt begin to achieve the sucess that you are about to build.
D.B.
-Who moved the horse?
I use to work for a local phone company who was also an ISP. I saw the price list for the equip they had and knew how much a month they were getting from each customer. It is almost charity....
Let me save you lots of trouble and money.
Don't do it. I had an ISP from 95-97, when we finally went under big time. I have been assembling my horror stories in hopes of writing a book about the whole miserable experience. But I will probably get sued for that as well. (like everything else.)
If you insist on doing it make sure you have the following:
Multiply all your cost estimates by 1000, because no matter what you think, you are wrong.
A billing system is not a luxury
Don't assume anything about the amount of customers you are going to get. In fact, divide your estimate by 1000.
Have at least one year of cash in the bank to asborb the costs.
Don't rent any office space until you show a profit.
Forget about your life. It is now over. Every moment of every day will be absorbed with questions like "Can I run an IRC server on your unix box." Or "I put your floppy in that you sent me and now my monitor doesn't work." (She didn't have the monitor turned on.)
Be prepared for the lawyer "cease" letters because one of your users is posting something they shouldn't
You won't be able to sell if after a couple of years, so take that out of your business plan now.
You probably won't be able to sell it, EVER!
You will *Never* be cheaper, better, or faster
Advertising costs will kill you.
Those sportster modems are a REALLY bad idea.
Every one of your users wants something for nothing.
Don't borrow from your family to get the project started. You will never be able to pay them back. And you will just look like a fool for the rest of your life. I could go on but you get the idea. Just don't do it. Don't even think about it. Just forget about it and be glad this message stopped you in time!
What do you consider 'research'? I would think that directing a question to a highly knowledgeable set of users in a very small space is a very efficient way to conduct research. I don't think the original poster was expecting someone to upload a business plan for him; I do think he expected to get some general information on the difficulties of building an ISP, and perhaps some specific information about, say, billing system issues. Once he obtained that info, I don't doubt that he would have then used that to do some other research, such as finding comparisons between billing systems from TeleOSS or some other trade journals. But when you're not exactly sure where to start, why not ask the experts first? And even though I have no interest in starting an ISP, I found the entire thread a good read. So I also dispute your assertion that this didn't belong on the front page.
Hi, I'm a unix admin from australia, and i used to be a perl coder for one of au's top 5 isp's, and I've been sitting back watching the ISP industry go up and down like a rabbit on heat. Me and many of my friends have looked at many ways to start an ISP that would be PROFITABLE.
/. reader of putting a nice fat wireless device on top of a building and selling wireless bandwidth. As for upstream bandwidth? get a business proposal, happeneing, talk to a few clients about your "proposal" and get them to express interest. Once you have about 20 or so perm clients, goto some big ISP, and tell them you have created a client base for whatever services, show them the buisness plan and try and convince them into installing a wireless device on the top of their building, and take 10% of what your clients are paying to subscribe.....
So heres some things you'll need to think about.
1. Australia DOESNT have unlimited bandwidth plans for ANYONE who isnt a home user. A software company i was working for was paying 19cents a MEG for bandwidth
2. Australia only has ONE main telco. Telstra. We dont have competitors to keep prices down.
3. PHONELINES in australia are only garuntee'd a 2400 bps connection, thats quiet a bit under your standard 56k modem, although, this was a great excuse for shitty download speeds, just blame telstra.
4. DSL would be difficult because you'de need to get a line directly from the modem to the exchange and use the phone exchange as an access server, although this isnt COMPLEX you'll have a good 3-6 months wait in getting a phone line connected, and when it does you'll be paying telstra for the bandwidth from the exchange -> your office and pay AGAIN from your office -> WWW.
So if your REALLY set heres what you need to do
get a 19 inch rack, pack it with linux/bsd systems, Dual p3-ghz with 256 meg ram and SCSI HDD's. And 2 different types of access server's. One Cisco one someone else, most people in australia are looking for CHEAP parts so you'll find masses of people buy shitty internal 56k software driven modems, thats why you need another type of access server.....Theres AU$200k ?
Talk to some of australia's alternate phone / bandwidth providers. NOT TELSTRA. Powertel does bandwidth in Australia's CBD although they arent the cheapest. you's looking at about AU$100k
setup and ongoing costs of AU$10k PLUS for your bandwidth. One thing you can be assured of is Upstream providers ARENT going to be going out of business.
My ISP used to work with Primus, Telstra and Optus for phone lines, someons bargin hunting.
Looking at Australia's ISP history, I'de recommend the idea of a previous
Anyway theres my AU 4 cents (US 2 cents)
Nitr0
ok, simple ask someone who's just done it.. give me a call on 0419 314281 ( i'm in Melb )and i'll point you in the right direction, you don't even need to be in the state to do it.. one person is enough to kick it off, as for tech support, either just get full on techo types who would be happy with email support and be prepaired to wait for a response, or setup a toll free hotline via ip over net for free to your mobile, ( hehe, only works if your net is working ) or a 0500 number is a good way if that is still working, user pays for the call. if your after mums and pops, plan on getting a girl or two trained up, try the local college for workers, those kids are great and will love the experience, i use a whole dorm, i paid for their parties every week, ( pizza's & beer to about $1000 a week)in return they keep the tech support lines manned 24/7 for me... as far as pipes and shit, call me and i'll show you the easy way to do it without a massive upfront cost, ( everything is v'isp'd so you only pay for your ports, start with 8 ports at around $XX each a month unlimited usage to 56k ), forget dsl or cable, you'll need very high density exchanges and there's only a few around melbourne's centre that can do it at the moment, plus you'll be competing with the big boys who have big budgets for marketing, support and the foot work to get in and see the clients etc etc ) no towns have dsl exchanges yet that i know of, so don't bother for another year or three. Now web hosting is easy to arrange, I'll show you how to get a 10gb web server for around $99 month which will let you host businesses etc and make easy money there. it's not as easy as i'm telling you, cos i was spending 20hours a day seven days a week running mine, and after four years i sold out so I could spend my time with the stranger who makes me dinner each night and these little people who are running around the house, who the milkman knows better then i do, haha.. Later Tony
As a ex-Administrator for a rural Oz ISP I thought I might share some input.
:))
Basically u'll need equipment, lets say a portmaster (which will provide 56K and ISDN access) unpopulated about $6,000 modems (set of 10 per card) about $3000 (those prices were second hand from memory though go check it out)a couple of servers for mail DNS web etc, cost depending on what u get. plus switches cables etc etc u can use the portmaster to dial into ur provider.
Then on top of that there are the lines.
based on Telstra prices 10 lines installed about $1500. plus about $18 per month per line.
then ISDN to Data provider (ISDN is charged per the minute regardless of local or otherwise)
U prob won't be able to get broadband except for sat which is prob a good idea as it is cheaper than isdn for data and will provide more bandwidth for hosting via the isdn. it also means u may be able to provide them with sat access
sat dish cost depends on where u are and the path of the sat. decoder price I have no idea, though u could lease it from ur data provider.
Then on top of that there is the cost of providing support.
I could give u lots more info if you email me
HTH
cya
Andrew
P.S. you will have to check out all the prices urself as those are from when I worked there