This section needs some fresh blood and new ideas. Drop me a line if you have a few to share.
Competition
This is one of the hardest sections of the new FAQ to write. When I first started, this was a wide-open business, with billions of opportunities out there for clever people. Avi Freedman started his business off old Sun parts, surplus modems and a SLIP connection. Karl Denninger of MCS started in a similar way. Now, Karl's sold his company to one of the big boys, and the ISP biz has lost a pugnacious, controversial, but somehow likeable figure.
Now, we have all the big telcos, the massive cable companies and even Microsoft for competition. How do I rate the threats as our industry passes towards the millenium?
Cable Net Access
Cable access is much faster than phone access, less secure and just a shade more expensive. In areas where it's feasible, it's going to be an enormous competitive threat.
The good news for many ISPs is that cable access is going to require an enormous and extremely expensive modernization project. In the past, I've felt that this goal might be impossible, or close to it. But now, cable access is a reality in many areas, and I would not doubt its potential to hurt many ISPs. If it's coming to your area, at a price cheaper than a second phone line + your rate, a lot of folks are going to switch.
Your best competitive weapon is that most people don't trust their cable companies; they've offered bad service for too long. You might suggest that people continue using your service for speed-insensitive and mission-critical services like email, even if they want to get a cable modem for speed.
DSL
This is your weapon in the war against cable. Because it's not a shared connection, it's likely to be faster. It's also more secure, since you're not sharing a bigger pipe with other users; you have your own pipe to the ISP, and then the bigger pipe comes in.
I'm not clear on the relationship between the telco, the ISP and the DSL service. I clicked on a GTE banner ad that was selling DSL service with no mention of an ISP. Worse, you'll need amazing bandwidth to serve more than a handful of DSL customers.
Hopefully some helpful readers will provide some more information on this hot topic. Just email me
Microsoft
Remember when we thought they'd take over the entire Internet, with proprietary support forums, their icon on every desk, etc, etc?
Didn't quite work that way.
Cheering.
For what it's worth, although I don't think the general public has anything like the vitrolic hatred most ISPs (including myself) have for Microsoft, I don't think they have any great desire to support the company more than they already do. I suspect this has contributed to the dismal record of Microsoft's online ventures.
AOL
AOL's an interesting case. They have recast themselves as an Internet company, but their access speeds are still dog-slow. They are now billed in news articles as "the world's largest ISP". I'm not sure whether to laugh or cry - especially since they now own Netscape.
Nonetheless, with the Netscape browser being an open source endeavor, I don't think they'll be able to do much with that to harm ISPs.. But I do predict more interesting times for Netscape's Netcenter, which presently looks like a boring also-ran in the portal wars.
Freenets
Traditionally, these were systems that used an incredibly clunky text-based system to provide an extremely limited connection to the Internet.
That system, however, was not what customers wanted, and so they started offering somewhat limited PPP access at extremely low prices. They're a dark horse in this business, but they definitely have potential to grow, with their low overheads, non-profit status and donated time and equipment.
The Federal Government
They're largely out of it. Thank goodness!