Best of the ISP-Lists

Competing with Cable

Can a small, dailup ISP stay in the game when cable TV networks start hawking Internet access in their bailiwick?

[December 13, 1999]

On the ISP-Tech list in May 1999, MN issued a cry for help after his local cable company announced it would be offering Internet access:

"Now my main investor is suddenly very uneasy about the future of the ISP business in general and specifically about spending a lot of money on the upgrades that I have planned for the near future. I think I have convinced him (for now) that the cable companies' promises are not all they are cracked up to be. However, I would be most appreciative of some ammunition to refute cable's claims in terms my investor can understand."

 

Many respondents downplayed the threat from cable.

[JM wrote] "My local cable company launched a huge advertising campaign for Internet services and I've been waiting for it for almost two years now. As to the technical issues: Cable is shared access, meaning the more people online, the slower things will go; also most cable companies are geared to one-way transmissions, they are not experts in two-way communications."

[MV concurred] "The majority of Internet users use the Net for very simple things like email; they have no need for a higher speed connection that triples or quadruples their month bill."

One respondent acknowledged that he'd lost some customers to cable, but found a silver lining to this cloudy situation.

[P wrote] "We initially lost 117 customers. However, within 90 days, 81 customers have returned because the cable service only works where it is installed. I know that broadband is the future, but with a great brand and quality services, you can recoup your investment with great profits for the next couple years."

[JGA also stressed the importance of superior service] "If you are a small ISP, you must focus on your customers and on the value-added services you may offer them. The big guys always make us think about the future."

[IK concurred about the need to look forward] "As the technology evolves, so must ISPs. IMHO, cable will eventually kill dial-up ISPs. This is not a question of technology -- people don't buy the best technology, but the easiest. It is time to evaluate your business. If cable could steal your dial-up business, get into the dedicated access business. Then if cable eats your user base, you will have diversified enough to survive."

[EW suggested another way to dodge the bullet] "One solution to the evolving business might be to develop your own alternative to the cable guys. My company specializes in 'wireless two-way cable' specifically to provide Internet, virtual private networks, etc., using RF." [Click Here to read about another easy wireless solution.]

The final word on the subject came from a respondent who actually runs a cable modem system:

[TM wrote] "There are many people that don't want or need high speed connects and aren't willing to pay the higher fee. So you will keep these customers. If people want speed and it is on top of the list, nothing you can do will stop the customer from leaving. Bottom line, if the dial-up ISPs want to keep their customers they need to offer something to compete."

—End