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Subject:	Re: UKNM: Free ISPs Vs. Paying ISPs (Don't Mention Dixons)
From:	Stefan Magdalinski
Date:	Tue, 6 Oct 1998 17:09:39 +0100

Sajid Mohammed wrote:
>
> Hello,
>
> The fortunes of the ISP industry have changed rapidly over the last
> couple of weeks, with the launch of FreeServe &
> BTClickPlusWe'veBeenHammeredByOftelAndDixons. Soon, we will see the
> launch of C&W's own free (?) service as well - I'm sure others are
> looking at this market also.

do you reckon?

> Especially as apparently a whopping 66% of domestic PC users aren't on
> the Net - is this really true? Also, it appears ON Digital (the mooks)
> are not going be offering web access via their box - they won't be
> offering access to Sky Digital's EPG either, but that's another
> story...I think it's a bad move on ON Digital not to support the Web,
> which is established and has an audience. Something you can't really
> say about Digital TV yet.

ON digital are going almost as badly as BSB ten years ago. and that's
saying something.

> Which means that there's going to be an almighty feeding frenzy like
> the early days of ISPs - remember how EasyNet aquired loads of small
> ISPs that had gone bust or weren't doing too well? I can see that
> history will repeat itself, first as tragedy, then as farce.
>
> Obviously, the paid-for ISPs have to move up the value chain. Already,
> they can legitimately say that by offering free unlimited tech support
> and not levying a surcharge on the cost of your call to the POP that
> they have a higher-value proposition. Also, it's been rumoured for

hello? freeserve don't levy. BTClick(plus) does, and is dead in the
water. so dead, it's funny. so dead, I want to ring up Ian Vallance and
just giggle down the phone.

And has been observed, the problem with free tech support is that it's a
cost with no economies of scale. you get 100 new customers, you add
another tech support person. The cunning thing about charging for it is
it chokes off demand for the most painful aspect of being an ISP.

Also, getting a cut of the telco fees is a trick that Demon and Easynet
have both been playing (quietly) for months. Although up to this point
they've just been pocketing the extra revenue. That may change.

> several days that Virgin.Net are planning to go 0800 on their dial-up
> access. Which to my eyes adds value to their proposition.

yep. well done.

> But how else can ISPs outmanouver the free ISP mob? Providing portal
> content, e-commerce, Quake servers and streaming media etc. etc. is
> all very well and good. But where are paying ISPs wanting at the
> moment?
> Personally, I just want super-fast access. Any ISP that wanted to
> offer me a dirt-cheap ISDN or leased line would get my interest - but

freeserve will give you 2 channel ISDN, or 2*56K bonded modems.

> I can't see that happening anytime soon.
>
> It may even come to pass that most paying ISPs mutate/aggregate into
> business-to-business services organisations, offering large scale
> connectivity for companies tied into bespoke Intranet/Extranet
> solutions using Notes/Domino or whatever - leaving the free ISPs to
> the consumers.

I bet you 10,000 pounds that that isn't what happens. The
business-to-business market is pretty well developed, and doesn't really
need companies with 50,000 spare modems. The surface technology
(Notes/Domino, whatever else) is utterly irrelevant to who you are
buying the underlying transport off.

The only way to make money out of companies tied down with Notes/Domino
is to remind them that it was a bloody stupid idea in the first place,
get them to fire the person who made the decision, and then build them
something that works.

> What services would people like to see the paid-for ISPs provide -
> which could differentiate them from the free ISPs?

The biggest thing that will help them retain users is the sheer shag of
changing. The thing that will gain them new ones is renegotiating their
telco contracts so they can also offer free access and still compete,
and then the market carries on as before.

Demon will still garner the geeks by offering static IP.

stefx, quit smoking, so extra bubbly and cute this week.
--
/**
Stefan Magdalinski m 0370 67 70 58
stefan