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Article #684

Re: Do Albany Area ISPs Compete...or Conspire?

#684
From: Barry B Floyd
Date: Thu, 15 Aug 1996 00:00
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Fortunately, we have the right to peaceably (sp?) gather, and freely speak.

Anyone is free to create mailing list to exchange information,
between 'presidents' or 'techies' or both, public or private.

Certainly, Daniel, you aren't suggesting that such communication 
be monitored or otherwise restricted. Do you?



If you believe that there is 'colusion' then your only reasonable
course of action would be to gather evidence of 'colusion'. Pointing
out the potential for 'colusion' is not sufficient.

You might gather a comprehensive list of ISP's serving the region
(recently posted) and monitor aspects of their businesses that are
regularly made public. For example, you might track:

  - un-metered 'Net access pricing
  - metered 'Net access pricing
  - amount of disk space provided
  - amount of connect time included in basic package deals
  - the type of backbone technology used
  - the type of information and services provided
  - the points of presence (exchanges) provided
  - etc.

Chart the parameters on a quarterly basis (back to the inception of 
the ISP market) and draw your own conclusions.



My guess is you might be able to prove the ISP's are all trying to
make more money/profits (no suprise) and are doing so by trying to
attract more clients. Clients are attracted to better/broader service
and lower prices. Within the past few months, several ISPs have lowered
prices and expanded service. Some have started dropping 'setup fees'
(few still charge setup fees). Some, in fact, offer the 1st month
of service free (or similar trial offers).


As previously pointed out, the market is not closed to outside (non-regional)
competition. To the contrary, it is becoming increasingly competitive,
with AT&T, NYNEX, cable operators, satelite operators, and 'private'
networks (e.g. schools and employers)_ offering 'Net access. In addition,
there are 'free' e-mail boxes and WWWeb disk space available to almost
anyone with a modem. 

Charts and graphs of 'evidence' might point to a convergence, but most
likely in favor of the consumer. 

The investment in hardware and salaries required to compete in the market
can only be paid for through volume, not nickel and diming a small number
of clients. A critical number of clients who regularly use the service,
and always renew their contracts, may generate enough income to pay
expenses. However, some new technology, or un-expectedly low (billable)
usage, or a few too many closed accounts, etc. seem to always require
more income. Raising rates is a method resulting in diminishing returns.
Attracting new clients and/or providing new (billable) services seems
to work best. The may be a 'shake-out' in the market, with those 
retaining too few clients relative to their expenses being shook out.



These comments may be applicable to the ISP market, I don't know. They
do apply to software consulting, product development, etc.

2 cents worth
-- 
+--------------------------------------------------------------------+ 
| Barry B. Floyd     \\\                             floydb1@rpi.edu |
| RPI Alum. '84'87'88 \\\http://www.geocities.com/SiliconValley/7331 |
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From: floydb1@lib101.its.rpi.edu (Barry B Floyd)
Subject: Re: Do Albany Area ISPs Compete...or Conspire?
Date: 1996/08/15
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