[24332] in North American Network Operators' Group
Death knell for residential non-cable access?
daemon@ATHENA.MIT.EDU (Roeland M.J. Meyer)
Wed Jun 16 14:16:49 1999
Reply-To: <rmeyer@mhsc.com>
From: "Roeland M.J. Meyer" <rmeyer@mhsc.com>
To: "LIST NANOG" <nanog@merit.edu>,
"LIST - Domain Policy" <DOMAIN-POLICY@LISTS.INTERNIC.NET>
Date: Wed, 16 Jun 1999 11:11:28 -0700
Errors-To: owner-nanog-outgoing@merit.edu
This is a multi-part message in MIME format.
------=_NextPart_000_0018_01BEB7E8.FAE80D40
Content-Type: text/plain;
charset="iso-8859-1"
Content-Transfer-Encoding: quoted-printable
I'm getting more info, but it looks as if even access to the Internet =
may be offered for free. Free ISP services are being contemplated by AOL =
and MSN, as a response to low-cost offrerings from the RBOCS, and more =
notably, from TCI and other broadband cable operators. The battle-ground =
is the residential access market.
Currently, dialup modem acces is dropping to $9US per month in order to =
compete with cablemodem offerings. Considering the cost per kilo-bit =
ratio (CKb), cable-modems are still a better value at this time, for =
residential customers. There are technical and contractual reasons why =
cable-modems are not suitable for business use. In that arena, xDSL is =
making serious in-roads and there is still a market, if you are a DSL =
re-seller/provisioner.
As you can see in the accompanying chart, even at zero ISP cost, modems =
can no longer compete as an access media, unless the telco charges are =
dropped. This is not going to happen any time soon. Evenso, the local =
telco's are the only ones able to do it.
This presents a serious threat to direct access providers like AOL and =
MSN, even the WebTV system is being threatened by this cable-modem =
roll-out, as they use dial-in modems to provide their services. Coupled =
with restrictive practices, by cable operators, it is difficult to even =
provide ISP services as a third-party on the cable-modem network. The =
cable-modem customer is required, contractually, to use the ISP services =
of the cable operator. What this means, for third-party access =
providers, is a serious loss in residential business. Possibly, a =
decimation of that market.
The consideration, of the major players, in giving Internet access away, =
at no cost, should be viewed as an extreme measure on their part. The =
collateral damage in this attempt at saving their market is to utterly =
destroy the local access ISPs, whose primary revenue is local access =
services. Granted, they won't survive the cable-modem threat on their =
business, once cable-modems become available in their area, anyway.
Note that in the following chart; Monthly costs are estimated, based on =
California rates, and include local telco service charges where =
appropriate.
=20
Type bit-rate Monthly CKb
modems 33.6Kbps ~$25US $0.74US note:$25 telco + $0 ISP =
charges
modems 33.6Kbps ~$34US $1.01US note:$25 telco + $9 ISP =
charges
Cable 1024Kbps ~$49US $0.04US
DSL 1148Kbps ~$600US $0.52US
T1 1540Kbps ~$2500US $1.62US
--------------------
Roeland M.J. Meyer, CEO
Morgan Hill Software Company, Inc.
http://www.mhsc.com/
mailto://rmeyer@mhsc.com
--------------------
------=_NextPart_000_0018_01BEB7E8.FAE80D40
Content-Type: text/html;
charset="iso-8859-1"
Content-Transfer-Encoding: quoted-printable
<!DOCTYPE HTML PUBLIC "-//W3C//DTD W3 HTML//EN">
<HTML>
<HEAD>
<META content=3D"text/html; charset=3Diso-8859-1" =
http-equiv=3DContent-Type>
<META content=3D'"MSHTML 4.72.3110.7"' name=3DGENERATOR>
</HEAD>
<BODY bgColor=3D#ffffff>
<P><FONT size=3D2>I'm getting more info, but it looks as if even access =
to the=20
Internet may be offered for free. Free ISP services are being =
contemplated by=20
AOL and MSN, as a response to low-cost offrerings from the RBOCS, and =
more=20
notably, from TCI and other broadband cable operators. The battle-ground =
is the=20
residential access market.<BR><BR>Currently, dialup modem acces is =
dropping to=20
$9US per month in order to compete with cablemodem offerings. =
Considering the=20
cost per kilo-bit ratio (CKb), cable-modems are still a better value at =
this=20
time, for residential customers. There are technical and contractual =
reasons why=20
cable-modems are not suitable for business use. In that arena, xDSL is =
making=20
serious in-roads and there is still a market, if you are a DSL=20
re-seller/provisioner.</FONT></P>
<P><FONT size=3D2>As you can see in the accompanying chart, even at zero =
ISP cost,=20
modems can no longer compete as an access media, unless the telco =
charges are=20
dropped. This is not going to happen any time soon. Evenso, the local =
telco's=20
are the only ones able to do it.</FONT></P>
<P><FONT size=3D2>This presents a serious threat to direct access =
providers like=20
AOL and MSN, even the WebTV system is being threatened by this =
cable-modem=20
roll-out, as they use dial-in modems to provide their services. Coupled =
with=20
restrictive practices, by cable operators, it is difficult to even =
provide ISP=20
services as a third-party on the cable-modem network. The cable-modem =
customer=20
is required, contractually, to use the ISP services of the cable =
operator. What=20
this means, for third-party access providers, is a serious loss in =
residential=20
business. Possibly, a decimation of that market.</FONT></P>
<P><FONT size=3D2>The consideration, of the major players, in giving =
Internet=20
access away, at no cost, should be viewed as an extreme measure on their =
part.=20
The collateral damage in this attempt at saving their market is to =
utterly=20
destroy the local access ISPs, whose primary revenue is local access =
services.=20
Granted, they won't survive the cable-modem threat on their business, =
once=20
cable-modems become available in their area, anyway.</FONT></P>
<P><FONT color=3D#000000 size=3D1>Note that in the following chart; =
Monthly costs=20
are estimated, based on California rates, and include local telco =
service=20
charges where appropriate.</FONT></P>
<P><FONT size=3D2><BR></FONT> </P>
<BLOCKQUOTE><FONT size=3D2></FONT><FONT color=3D#000000 size=3D1><FONT=20
face=3DFixedsys>Type =
bit-rate =20
Monthly CKb</FONT></FONT></BLOCKQUOTE>
<BLOCKQUOTE><FONT color=3D#000000 size=3D1><FONT=20
face=3DFixedsys></FONT></FONT><FONT color=3D#000000 size=3D1><FONT=20
face=3DFixedsys><FONT color=3D#000000 size=3D1><FONT=20
face=3DFixedsys>modems 33.6Kbps =20
~$25US $0.74US note:$25 telco + $0 ISP =
charges</FONT></FONT></BLOCKQUOTE>
<BLOCKQUOTE>modems 33.6Kbps =20
~$34US $1.01US note:$25 telco + $9 ISP =
charges</FONT></FONT></BLOCKQUOTE>
<BLOCKQUOTE><FONT color=3D#000000 size=3D1><FONT=20
face=3DFixedsys></FONT></FONT><FONT face=3DFixedsys></FONT><FONT =
face=3DFixedsys=20
size=3D1>Cable 1024Kbps =20
~$49US $0.04US</FONT></BLOCKQUOTE>
<BLOCKQUOTE><FONT face=3DFixedsys=20
size=3D1>DSL =
1148Kbps =20
~$600US $0.52US</FONT></BLOCKQUOTE>
<BLOCKQUOTE><FONT face=3DFixedsys=20
size=3D1>T1 =20
1540Kbps ~$2500US =20
$1.62US</FONT></BLOCKQUOTE>
<P><FONT size=3D2><BR></P>
<P><FONT size=3D2>--------------------<BR>Roeland M.J. Meyer, =
CEO<BR>Morgan Hill=20
Software Company, Inc.<BR><A href=3D"http://www.mhsc.com/"=20
target=3D_blank>http://www.mhsc.com/</A><BR><A =
href=3D"mailto://rmeyer@mhsc.com"=20
target=3D_blank>mailto://rmeyer@mhsc.com</A><BR>--------------------<BR><=
/FONT></P>
<P> </P></FONT></BODY></HTML>
------=_NextPart_000_0018_01BEB7E8.FAE80D40--
