The Boston Diaries

The ongoing saga of a programmer who doesn't live in Boston, nor does he even like Boston, but yet named his weblog/journal “The Boston Diaries.”

Go figure.

Monday, August 21, 2000

ISP Profitability

Months ago Mark and I had a conversation about ISPs and the services they offer. At the time, Atlantic Internet, my current provider, was not pursuing the home dialup market and I could understand why. While it's a steady revenue stream, it's the tech support that eats into any profit the company might get (and the tech stories that you hear about—they're true). But get mostly corporate customers, you can really charge and then the tech support doesn't eat into the profits.

But Mark kept arguing that Atlantic Internet shouldn't give up the home dialup market. But another argument against the small ISP are the likes of BellSouth.Net and Adelphia Cable. The former is a subsidiary of BellSouth, one of the BabyBells so they pretty much own the phone lines down here, and Adelphia, well, a cable company has pretty much the same coverage (more or less) as the BabyBells, and how can you compete with cable modems?

Mark and I seem to have a difference of opinion in the area of ISP profitability. I don't think they are, and Mark does.

00:31:02 [Mark]: So I don't think the ISP makes that much off you by the time they are done.

00:32:49 [Sean]: But it's not much better with regular dialup lines, what with paying the phone company and the equipment needed (not to mention the upgrades—I remember [ISP] customers screaming for 28.8 even before 28.8 was standardized between modems)

00:34:34 [Mark]: Exactly. That's what I'm talking about. So that's why there is about as much incentive to sell DSL as there is dialup lines. Which is why I never liked the “we don't do dialup” attitude. The reason being that if everybody hosts web pages it won't do much good if nobody can browse them.

01:24:16 [Sean]: Perhaps I am. But I'm still not entirely convinced a local ISP can be profitable.

01:25:31 [Mark]: My argument is that a local ISP, run with the correct know-how can be. The problem is that tech guys don't know about the know-how. That is something you need to find customer service reps for.

Something neither company probably has. Sales, Marketing and Tech aren't the only things.

01:26:25 [Mark]: I would be more tempted to hire a Wal*Mart employee for ISP tech support than a person with a clue. The person with the clue may know more than the Wal*Mart person, but the Wal*Mart person will make an angry customer a happy customer.

I don't think anybody at either company got that.

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