[9225] in Commercialization & Privatization of the Internet
Re: more on Internet buying coop
daemon@ATHENA.MIT.EDU (Martin L. Schoffstall)
Thu Dec 23 12:22:09 1993
Date: Thu, 23 Dec 1993 12:23:37 +0000
From: "Martin L. Schoffstall" <schoff@psi.com>
To: Miles R Fidelman <fidelman@civicnet.org>, com-priv@psi.com,
Cc: adamfast@u.washington.edu, pozar@kumr.lns.com
The concept of a co-op of course is not new. I've heard it since at least
1990. However, there is an alternative way to look at your model:
- you are espousing the GSA model of buying computers ala DeskTop I,II,III,
these are not considered successes because....
- generally co-ops work well in low change environments: books, farm
instruments, cars, grain etc It is not that co-ops don't deal in things that
change quickly but not 100% of their inventory
In reading some of the text below it reminds me of some of the NSFNet 1980's
rhetoric, ANS business plan etc
Take care not to be Overcome By Events (OBE'ed) as above
Marty
> Return-Path: <fidelman@world.std.com>
> Date: Sat, 18 Dec 1993 17:47:55 -0500 (EST)
> From: Miles R Fidelman <fidelman@civicnet.org>
> Subject: more on Internet buying coop
> To: com-priv@psi.com, communet@nysernet.org, nii_agenda@civicnet.org
> Cc: adamfast@u.washington.edu, pozar@kumr.lns.com
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>
> Hi Folks,
>
> Thanks to all who've responded so far, and for the information on
> existing Internet buying co-ops.
>
> I guess I should be a little more specific. There are a number of
> groups that are buying an Internet feed, operating a POP, and reselling
> to smaller users. I have a different model in mind - one that doesn't
> involve any operational role:
>
> Its fairly common for municipalities to negotiate a common RFP. For
> example, all 351 cities and town in Massachusetts, plus state agencies,
> plus university police forces (I believe) are elibible to purchase from
> a common contract for police cruisers.
>
> Once a year, through the Mass. Police Chief's Association, a common RFP
> is drawn up, which is then issued and negotiated through the town of
> Newton's purchasing dept. Once an award is made, usually to a dealer,
> purchasers issue their own purchase orders directly to the dealer, take
> delivery directly, and are billed directly. But... they get much
> better terms than they would if they hadn't negotiated en masse. There
> are quite a few of this kind of contract floating around -- some are
> organized through city purchasing departments, some through regional
> groups -- in some cases the contract manager takes a small fee or piece
> of the discount to handle the costs of contract negotiating.
>
> I see a similar arrangement for buying IP service. We negotiate
> jointly, but then buy separately. So instead of setting up a private
> access network such as The Little Garden, buyers would go directly to
> whoever wins the contract. We'd probably want to award two contracts,
> and we might want to structure the RFP into geographic areas in order
> to give the regionals a chance to bid. We'd also probably want to
> rebid every two years or so. Of course, some of the local projects that
> operate resale networks could benefit from joint negotation with the
> regionals and nationals.
>
> We could also do some things like:
>
> -- representing groups of participants in public utility commission
> hearings (for example, Prodigy has been very active in Mass. pushing
> for ISDN rates that make ISDN a viable vehicle for reaching Prodigy --
> why shouldn't we band together to push for more attractive leased line
> rates)
>
> -- negotiating for discounts on hardware and software buys
>
> -- possibly joining together to fund and contract for local access
> facilities (example: Teleport provides telephone bypass services in the
> greater Boston area -- there is potentially a market for them on Cape
> Cod, but there's about 30 miles of fiber to run for them to reach the
> Cape -- if a group of buyers got together and committed a level of
> business, and possibly arranged an industrial finance bond to pay for
> laying the cable, Teleport might move a lot quicker than they would
> otherwise)
>
> In short: I don't see this coop as an operational entity, rather as a
> contractual, negotiating, and possibly financing vehicle.
>
> Happy Holidays,
>
> Miles
>
> p.s. of course the American College of Radiology might benefit from
> joining a buying coop :)
>
>
>
>
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