Slashdot Mirror
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."
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.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.
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
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.
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
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!
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?
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.
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.
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! ------
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."
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
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!
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....
"To stay awake all night adds a day to your life" - Stilgar | eMT.
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.
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.
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.
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
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
That's true for the states (except possibly very rural areas), but what is the situation in Australia?
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.
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?
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