ISPs Are Nuts (And Bolts)
Of Any Broadband Future

Internet service providers (ISPs) now know that corporate America hopes that broadband Internet services will bring the economy back to boom, but corporate plans ignore small ISP businesses, threatening the whole enterprise.

by Jim Wagner Managing Editor, ISP-Lists [March 14, 2002]

Organizations like the DSL Forum and TechNet, with constituents ranging from equipment makers like Lucent Technologies and Cisco Systems, Inc. to PC giants like Dell and Hewlett-Packard, all claim the U.S. economy can be improved if broadband can be served to the masses.

But overlooked in all the rhetoric of a broadband nirvana is the fact that there is no actual plan to make the vision a working reality. The actual nuts and bolts that will bring everything together so millions of consumers and businesses can take advantage of these not-so-new technologies are still locked up (or, at least, buried under city streets).

To get broadband to the masses, ISPs are going to need to be at the forefront of any deployment strategy. Given their dominance with dialup customers, ISPs are the natural point of entry for residential customers for high-speed Internet access.

The DSL Forum last month announced the most ambitious goal for broadband in this decade, challenging ISPs, competitive local exchange carriers (CLECs) and incumbent LECs (ILECs) to deliver DSL to 200 million customers by 2005. The targets are twice as large, with half the time frame, as the goals set by TechNet earlier last year.

William Rodey, DSL Forum chairman, concedes that there are problems with DSL deployment around the world, and that technological improvements are necessary. But he passes over that admission and goes on to the dream.

"If you're going to have a goal, you might as well have a worthy one," he said with a chuckle. "DSL has got to be as easy as plugging in a cable to get running."

In order to get more customers signed up, DSL as an industry needs as many different providers as possible to transition subscribers from dialup to broadband. ISPs will play a crucial role in that deployment since most people buy from a company they trust. Sadly, with the service, pricing, and problems associated with any Baby Bell operation, most Internet customers connected to the local phone company won't make the leap of faith from dialup to broadband.

Independent providers were dealt a setback with the recent vote in the House to adopt the hated Tauzin-Dingell Bill, which essentially does away with the provisions of the Telecommunications Act of 1996.

While the Bill doesn't have a chance, thanks to ISP knight in shining armor Sen. Ernest Hollings, chairman of the Senate Commerce Committee, who helped write the Telecommunications Act of 1996, it does demonstrate that politicians just don't get it when it comes to the Internet and those who provide broadband services.

Troy Settle, president of Virginia-based ISP Pulaski Networks, summed up his feelings for his duly elected representative with a letter he sent to the politician, saying:

"I would like to thank you for your vote to put me out of business. On February 27, 2001, the Tauzin-Dingell sponsored HR1542 came up for vote, and your vote of AYE has put the first nail in my company's coffin."

Legislation and regulation will play a pivotal role in determining whether ISPs and CLECs will be able to deliver broadband to consumers.

As it stands, DSL, as sold through resellers (ISPs and CLECs), makes up a small part of the DSL business. Bell "wholesale" numbers show how much a role independent providers play in bringing DSL to customers.

On average, the Bells claim only 20 percent of DSL business comes through "wholesale" channels, something Mark Kersey, a broadband analyst for research firm ARS, Inc., said will need to change.

"When you look at it, the Bell companies still need the ISPs because the ISPs still control the vast majority of the dialup market," Kersey said. "That being the case, it's much easier for AOL or others to go to their customers and try to convince them to go to broadband than it would be for BellSouth to go to AOL customers and say, hey 'you've been happy with AOL, but why don't come over to BellSouth for DSL service?' "

Perhaps BellSouth actually hopes to acquire AOL's subscribers?

— End