5 ms·

My ideal ISP: Providing internet access is their only business. They thrive at providing as fast service as they can. If they have to have data caps that's fin

My ideal ISP: Providing internet access is their only business. They thrive at providing as fast service as they can. If they have to have data caps that's fine; but they don't advertise unlimited unless that's what they provide. They don't inspect packets. It seems that few of my ideal ISPs exist. My question is: why? Does the market not favor this type of ISP? Or does the other type have a competitive advantage that prevents my ideal ISP from thriving (and if so, what is it?)?

natnat 15y ago
When all you do is provide a dumb pipe, you're a commodity. When you're selling a commodity, and there is any competition at all, your margins will race down to virtually nothing pretty damn quickly. No one wants to invest billions of dollars to build up the infrastructure for a barely profitable ISP.
- MatthewPhillips 15y ago
  Does it matter? If consumers want the commodity won't someone step forth to take the small margins? So is it ultimately that consumers don't want this particular commodity badly enough to force the market to exist?
- RyanKearney 15y ago
  >No one wants to invest billions of dollars to build up the infrastructure for a barely profitable ISP. Google does.
  - tedunangst 15y ago
    Providing internet access is not Google's only business.
  - untog 15y ago
    But Google isn't an ISP and an ISP only. They make a ton of money as a direct result of you having an internet connection.
  - aw3c2 15y ago
    Huh? Last time I checked Google was a advertising giant who collects data on people's data/details (be it internet usage or whatever and be it "anonymised" or not). Google is not a charity.
- daniel-cussen 15y ago
  Selling a commodity is not automatically a bad idea. Chilean miners have been doing very well for the last ten years by selling copper, moly, silver, gold, at huge margins. (Before 2003 they merely did OK).
- jamii 15y ago
  There is plenty of room for premium ISPs (such as bethere) as long as they aren't locked out by the cost of running cables. The pipe might be dumb but latency, bandwidth caps, traffic shaping, filtering and blocking/censoring all contribute to quality. I'm totally happy to pay an extra $10 a month for a solid connection. I suspect gamers would be a big market for bethere if they had any advertising at all.
- hammock 15y ago
  It's a Cournot game, and it does work - you invest in infrasx up front that will get you a fixed capacity (bandwidth). The airline industry is the same way- an airline buys a number of airplanes up front which get them a fixed # of seats to sell. http://en.wikipedia.org/wiki/Oligopoly#Cournot-Nash_model http://en.wikipedia.org/wiki/Oligopoly#Cournot-Nash_model
delinka 15y ago
My theory is that even the "ideal" ISPs will sell out to a behemoth if they offer enough money. It's the best way to make your question irrelevant and keep Behemoth's revenues and profits up.
wmf 15y ago
"Triple play" (Internet, phone, and TV) is dramatically more profitable than a dumb pipe and thus will out-compete any "nice" ISP.
there 15y ago
i used to work for an ISP like that. there were tons of independent ISPs back in the dial-up days. ADSL killed most of them that hadn't already been gobbled up by the bigger national ISPs, because the infrastructure build-out was too expensive. we tried our own SDSL service by ordering alarm circuits to customers houses and co-locating our own DSLAMs in telco offices. it was expensive and couldn't be done everywhere we wanted to. in order to remain competitive, my ISP had to resell ADSL service straight from at&t/sbc (they provided the line and terminated them over our fiber connection, so we would be the actual data provider and route customers out to the internet). they only allowed us to do this because they were forced to by the government as part of the AT&T re-merger. however, the rate that they sold us a DSL connection was higher than what they were advertising to customers in the same market, so even if we broke even on a customer, we'd still be more expensive than what at&t was offering. we couldn't compete on price and by then, cable speeds were already much higher than what ADSL could do, so many customers went from a dialup connection with us to ADSL with at&t or cable with comcast. we started our own wireless service to avoid the middlemen, putting up big antennas on water towers in nearby suburbs and backhauling the traffic to us over t1s, t3s, and point-to-point heavy duty wireless connections. it was much more labor intensive, having to do directv-style truck-roll installations instead of just remotely activating a toggle on a customer's phone line like with adsl. maintenance costs were high, having to send technicians out all the time to realign wireless antennas. other ISPs would pop up and other equipment on water/cell tower antennas would suddenly degrade our wireless signal quality. they're still in business, but i haven't worked there in 5 years so i don't know what their books look like. looking at their website, their cheapest ADSL plan is $27.95, and the same speed plan on at&t's website is $14.95. when internet service is a commodity, people just want whatever works for whatever is cheapest. they don't care about expert, local customer service, or high quality datacenters.
- lutorm 15y ago
  when internet service is a commodity, people just want whatever works for whatever is cheapest. they don't care about expert, local customer service, or high quality datacenters. We had Cruzio in Santa Cruz, and from what I gathered they just resold AT&T ADSL. However, after the horrific experience with SBC / AT&T as an ISP, I gladly paid whatever extra they charged just to actually be able to talk to a person (which wasn't much anyway.)

natnat 15y ago

When all you do is provide a dumb pipe, you're a commodity. When you're selling a commodity, and there is any competition at all, your margins will race down to virtually nothing pretty damn quickly. No one wants to invest billions of dollars to build up the infrastructure for a barely profitable ISP.

MatthewPhillips 15y ago
Does it matter? If consumers want the commodity won't someone step forth to take the small margins? So is it ultimately that consumers don't want this particular commodity badly enough to force the market to exist?
RyanKearney 15y ago
>No one wants to invest billions of dollars to build up the infrastructure for a barely profitable ISP. Google does.
- tedunangst 15y ago
  Providing internet access is not Google's only business.
- untog 15y ago
  But Google isn't an ISP and an ISP only. They make a ton of money as a direct result of you having an internet connection.
- aw3c2 15y ago
  Huh? Last time I checked Google was a advertising giant who collects data on people's data/details (be it internet usage or whatever and be it "anonymised" or not). Google is not a charity.
daniel-cussen 15y ago
Selling a commodity is not automatically a bad idea. Chilean miners have been doing very well for the last ten years by selling copper, moly, silver, gold, at huge margins. (Before 2003 they merely did OK).
jamii 15y ago
There is plenty of room for premium ISPs (such as bethere) as long as they aren't locked out by the cost of running cables. The pipe might be dumb but latency, bandwidth caps, traffic shaping, filtering and blocking/censoring all contribute to quality. I'm totally happy to pay an extra $10 a month for a solid connection. I suspect gamers would be a big market for bethere if they had any advertising at all.
hammock 15y ago
It's a Cournot game, and it does work - you invest in infrasx up front that will get you a fixed capacity (bandwidth). The airline industry is the same way- an airline buys a number of airplanes up front which get them a fixed # of seats to sell. http://en.wikipedia.org/wiki/Oligopoly#Cournot-Nash_model http://en.wikipedia.org/wiki/Oligopoly#Cournot-Nash_model

delinka 15y ago

My theory is that even the "ideal" ISPs will sell out to a behemoth if they offer enough money. It's the best way to make your question irrelevant and keep Behemoth's revenues and profits up.

wmf 15y ago

"Triple play" (Internet, phone, and TV) is dramatically more profitable than a dumb pipe and thus will out-compete any "nice" ISP.

there 15y ago

i used to work for an ISP like that. there were tons of independent ISPs back in the dial-up days. ADSL killed most of them that hadn't already been gobbled up by the bigger national ISPs, because the infrastructure build-out was too expensive. we tried our own SDSL service by ordering alarm circuits to customers houses and co-locating our own DSLAMs in telco offices. it was expensive and couldn't be done everywhere we wanted to. in order to remain competitive, my ISP had to resell ADSL service straight from at&t/sbc (they provided the line and terminated them over our fiber connection, so we would be the actual data provider and route customers out to the internet). they only allowed us to do this because they were forced to by the government as part of the AT&T re-merger. however, the rate that they sold us a DSL connection was higher than what they were advertising to customers in the same market, so even if we broke even on a customer, we'd still be more expensive than what at&t was offering. we couldn't compete on price and by then, cable speeds were already much higher than what ADSL could do, so many customers went from a dialup connection with us to ADSL with at&t or cable with comcast. we started our own wireless service to avoid the middlemen, putting up big antennas on water towers in nearby suburbs and backhauling the traffic to us over t1s, t3s, and point-to-point heavy duty wireless connections. it was much more labor intensive, having to do directv-style truck-roll installations instead of just remotely activating a toggle on a customer's phone line like with adsl. maintenance costs were high, having to send technicians out all the time to realign wireless antennas. other ISPs would pop up and other equipment on water/cell tower antennas would suddenly degrade our wireless signal quality. they're still in business, but i haven't worked there in 5 years so i don't know what their books look like. looking at their website, their cheapest ADSL plan is $27.95, and the same speed plan on at&t's website is $14.95. when internet service is a commodity, people just want whatever works for whatever is cheapest. they don't care about expert, local customer service, or high quality datacenters.

lutorm 15y ago
when internet service is a commodity, people just want whatever works for whatever is cheapest. they don't care about expert, local customer service, or high quality datacenters. We had Cruzio in Santa Cruz, and from what I gathered they just resold AT&T ADSL. However, after the horrific experience with SBC / AT&T as an ISP, I gladly paid whatever extra they charged just to actually be able to talk to a person (which wasn't much anyway.)