On Mon, Mar 05, 2001 at 01:22:31PM -0600, Bob Tanner wrote:
>Quoting Thomas T. Veldhouse (veldy at veldy.net):
>> I think it is the consumer grade DSL that has been the cause of the
>> insolvency in alot of the ISPs.  They tried to compete a little too much.
You can't compete too much when Qwest and others are beating down your door to
buy you out. You stay in the fight until you get the highest bidder or you
don't fight at all and sell your services at a higher price and go broke as
your customers vanish from beneath you. There is no middle ground, there's no
happy go lucky small ISP's who's customers love them and would never leave and
they're guaranteed $X profit per mo. They go broke.
>
>As an ISP, I agree.  
>
>When we see the competition offering 640k/256k routed networks for $25/month I
>just shake my head and ask how can they make any money? 
The same way they make money off dial-ups (the ISP I worked at made approx.
25-35 cents per customer on a dial-in link.), the bigger you are the more that
comes in. If they can get 3000 customers, at .30 a peice, that's $900 a month.
Not a LOT of money, but if they have 3000 in each of 15 states, that's $13500
per month. It's a profit, but at the expense of dealing with a LOT of
customers. (which corresponds directly to piss-poor service.) It all breaks
down to the law of numbers. Unfortunately, their goal is to get customers as
fast as possible, bill them, and not give a rats ass once you have your $$.
>
>The cost of the ATM link, the hardware, the backbone connectivity AND people's
>salaries add up quickly and getting only $25/month/client means you have to have
>lots of clients who don't call to often for support!
When combining your # of customers with profit per cust. it's an exponential
earnings scale while the cost of support rises linearly to the # of customers
your have.
>
>Flipe side.
>
>The customer is able to ISP hop for the best deals. Definately a customer
>market.
That's why huge ISP's have been eating small ones by the truckload, to wrangle
all the customers into a few choices, the less places to go, the more likely
your customer base grows steadily.
>
>
>
>-- 
>Bob Tanner <tanner at real-time.com>       | Phone : (952)943-8700
>http://www.mn-linux.org                 | Fax   : (952)943-8500
>Key fingerprint = 02E0 2734 A1A1 DBA1 0E15  623D 0036 7327 93D9 7DA3
>
-- 
Thomas J. Hudak
Systems Administrator
Sistina Software Inc. - www.sistina.com
Phone: 612.379.3951 Page: 612.318.1967
Fax: 612.379.3952

"There are three kinds of people in this world, those who can count and those
who can't."
	-Warren Buffet
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