Date: Tue, 27 Nov 2001 23:38:06 -0800 From: "Ted Mittelstaedt" <tedm@toybox.placo.com> To: <jacks@sage-american.com>, "Bob Hall" <rjhalljr@starpower.net>, <freebsd-questions@FreeBSD.ORG> Subject: FUD on small ISP's, was RE: this spam Message-ID: <004001c177df$9e727c80$1401a8c0@tedm.placo.com> In-Reply-To: <3.0.5.32.20011127193957.01042450@mail.sage-american.com>
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>-----Original Message----- >From: owner-freebsd-questions@FreeBSD.ORG >[mailto:owner-freebsd-questions@FreeBSD.ORG]On Behalf Of >jacks@sage-american.com >Sent: Tuesday, November 27, 2001 5:40 PM >To: Bob Hall; freebsd-questions@FreeBSD.ORG >Subject: Re: this spam > >Soooooo, I would guess that small ISP is trying to do something extra in >the way of services AND lower pricing in order to keep that customer base >and not just compete, but to STAY in business.... for as long as they >can... which is becoming harder and harder until they can no longer survive >against the bigger ISPs. I for one would NOT want to be a small struggling >ISP with skimpy resources in these tougher economic times with more dark >clouds ahead..... > >If and when the bigger ISP REALLY wants more market share (which includes >that of the smaller ISP) all they have to do is lower the price and >eliminate that pricing edge... then say goodbye to the smaller one who >cannot stand to lose too many customers, spam controls or not... > Jack, this is old baloney FUD and I hate to waste the time to debunk it again but here goes. It's a myth that an ISP is financially unsound because it's small. ISP's are financially sound or unsound as a result of dumb-ass business decisions they make. This year in particular we have seen Northpoint, Rhythms, Covad, PSInet, and @Home all go bankrupt. These were giant, rich ISPs, not small ones. We have also seen -enormous- acquisition activity as ISP's attempt to put each other out of business by buying each other. Then the merged ISP is itself purchased, and the purchaser is then itself purchased, and on and on. And I didn't even mention all the ISP's that aren't bankrupt yet but declared losses. There's some fundamental truths to running ISP's that the ISP community has finally begun to understand. The first and most important is that the larger the ISP, the more alike all it's customers must be. People wonder why AOL is doing so good - well it's because they focus on ONE customer type; the bonehead user that's never touched a modem and needs extensive hand-holding. You can't run servers on AOL, you cannot run multiple machines on AOL, they happily scrape you off their plate if you want to go DSL (with a lame-assed "network access only" accout) and once the AOL users get sophisticated they can't stand the AOL bullcrap and quit the service. But, AOL frankly couldn't give a damn because once the user has graduated from play-pen ISP to a real ISP, they don't fit AOL's model anymore and thus are unprofitable to keep around. Imagine users in a giant bell curve. The X-axis is level of sophistication, the Y axis is size of the market. The big national ISP's all focus smack-dab on the center of the bell curve. They don't want users that are completely green because those users consume too much tech support time, and they don't want users that are extremely sophisticated because those users are either bandwidth hogs, or they want the ISP to do things (like assigning them static IP numbers) that fly in the face of the automatic systems that the big ISP's have set up. They want all users to have the same 2.5 e-mail boxes and use the same 50.75 hours per month of modem time. In short, as long as the user is just like every other user on the service, they will service it, the second that the user deviates from the master plan, it becomes a liability and is convinced to leave. But, those users that are at the ends of the curve, well they have needs and money too. They are people like you that want to run mailservers at home, they are businesses that have wanky networks that need tech support on occassionally, they are the weird, the misfits, the troublemakers, the people that demand to call the ISP and get a tech support person that knows their head from their ass. The smaller ISP's specialize in this market and do it very well. TO say as you do that the larger ISP's would be willing to lower prices to attempt to include this market is nothing more than the random musings of someone who knows very, very little about how real ISP's operate and market. The larger ISP's are not interested in the least in this market, it's absurd to think that they would make a single modification to their networks to accomodate any of these users in it. The idea that they would lower prices for it is hashish-induced dreams, and to think that users at the ends of the bell curve would be interested in those large cookie-cutter networks that have nothing in common with what they want done is a joke. Something gives me a feeling that your spouting all this because you unconsciously yearn for the good old days on the Internet when Mommy and Daddy US Government was underwriting all of it and all the kiddies were playing at the universities for free. You seem to be saying that the natural course of the Internet is for ISP's to continue to compete with each other and cut their prices repeatedly until nobody is charging anything for anything. Well, this ain't gonna happen. The ISP's that all thought like this and dropped their prices last year are now all bankrupt and the ones that refused to do it are still alive and profitable. The few ISP's like AT&T that thought the Internet was some sort of super-television and that charged subrate prices on the idea that it would increase their market share, thinking that advertiser dollars would cover the rest, are tired of losing money and are scraping off the freeloaders. Sorry, but the party is over. ISP's today are out there working with real customers for their money, they aren't speculating on Adam Smith economics theories. Ted Mittelstaedt tedm@toybox.placo.com Author of: The FreeBSD Corporate Networker's Guide Book website: http://www.freebsd-corp-net-guide.com To Unsubscribe: send mail to majordomo@FreeBSD.org with "unsubscribe freebsd-questions" in the body of the message
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