Fixed Wireless Resellers

There's a lot of bandwidth on a single fixed wireless Internet connection. Members of the ISP-Wireless list discuss what to do when one of your customers wants to share or resell a portion of that bandwidth.

[March 6, 2001]

On the ISP-Wireless list in February, TJ noted,

"A number of our potential wireless customers want to take a link and resell bandwidth. For example, a guy who has a small office building wants to resell Internet access to his tenants via a cat5 network in the building. How are most of you addressing these issues—or do you care what the customer does with his link as long as he pays for it?"

A number of respondents recommended letting customers resell as long as they pay a higher monthly fee:

[DJ suggested] "Put a clause in the contract saying if a customer uses their link for 'commercial services' such as reselling for a profit, the price goes up. The cable companies do this, and there's no reason you shouldn't. Say you charge your customers $59.95 per month. If this one wires his office building and charges each of his customers $59.95 a month, then I would increase your monthly charge to $199.95. There's no reason that you should work to maintain the network and let someone else reap large profits at minimal cost."

[RJ agreed] "Make a deal. What do you care: you're locking down customers and giving nothing back to the telco. Sounds like a great opportunity to me."

RB observed that if users are charged per-gigabyte, the reseller could be a very profitable asset:

"If you're charging a flat fee plus a surcharge for every GB beyond a certain point, it seems that this poor schmuck is going to have a pretty good-sized bill when his buddies do all their surfing. Cleverly done, you could make it so that when the guy splits up his giant bill, the cost to the folks he distributed to would be nearly the same as if they had signed up themselves."

Others said that it's important to keep control of users:

[JS offered] "While some amount of reselling is good, you should try to be the one supplying the tenants. If he wants to resell, he needs to be charged what you would be charged for a similar connection. If he balks, explain what it would cost to get all the hardware and expertise to do it on his own. As a compromise, you could offer him a free connection for signing up a certain number of others."

[KS countered] "Just give him a commission. He gets a residual income, and you get control of the end customers."

Still others urged caution when allowing users to get into reselling:

[AM noted] "Who will provide tech support, add/delete email accounts, and maintain DNS and webservers? There is more to reselling than just billing."

[AL advised] "Put a clause in your contracts that protects you—one that gives you the right to shut it down without notice if you suspect illegal activities or broken contractual agreements."

[KW agreed] "Make sure the reseller pays for his service one month in advance. Be cautious about extending credit. If the account is not paid on time, disconnect the link. And make sure your contract clearly states that you own the equipment and the rights to it, and that service will be temporarily suspended if not paid by the due date. Stipulate the procedure by which you will notify the customer that he is in default of your agreement."

—End