Telco ISP, another thought (was: ...Vaseline)

[Stephen Satchell]

At 6:49 PM -0500 5/3/97, Michael Dillon wrote:
>On Sat, 3 May 1997, Jon Lewis wrote:
>> I personally think that if the telco's
>> and other giants ever get serious about providing internet service with
>> clues, many (but certainly not all) smaller ISP's will be unable to
>> compete.
>
>That's a lot of ifs. Many people feel that it is simply not possible for a
>large company in any industry to maintain a high enough clue level to
>compete for very long against smaller entrepreneurial companies. I tend to
>agree with this. However I also agree that smaller ISPs that do not have a
>clue will be unable to compete with anyone.

While this has nothing to do with ARIN per se, I believe that in the
general the marketing story with regards to telcos getting into the ISP
marketplace is one that can affect the structure of ARIN.  It's called how
to leverage existing position.

Here is what the telco-base ISP has over any other ISP, be it small or
large:  access to the switch.  There are several companies who are looking
at what it's going to take to add modems seamlessly to a CO switch, and in
large quantities.  The elimination of the local loop and the integration of
the line card with modem makes it far cheaper per line for a telco to
provide service.  Depending on the tariff model the telco negotiates with
the state Public Utility (Services) Commission, that means either a healthy
profit or a significant underbidding of what the non-telco can do.

If the telco can attract signficiant dialup business, that means that you
have a 600-lb ape vying (vi-ing?) for IP addresses to service its market.

As for maintaining a clue level, the telcos are learning, and learning
fast.  Don't count them out of the race just yet.  (Cable companies are
another matter, from what I've seen in The Wall Street Journal and other
business sources.)

---
Stephen Satchell,{Satchell Evaluations, Motorola ISG}
http://www.accutek.com/~satchell for contact info
Opinions expressed are my own PERSONAL opinions.