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Further reading on the future
The Role of the ISP is Changing: Are You Ready?
Last week, we talked about how the Internet itself is changing. This week, I want to discuss how ISPs are also evolving, and in the future may be serving a role that's very different from the one they once served for Internet users. Remember the "old days" when a service station actually provided service, not just gasoline? Back then, you rolled up to the pump and a friendly (well, sometimes) attendant came out to fill your tank - but that's not all; he would also clean your windshield and even check your oil. You never had to get out of the car or risk getting smelly gas on your hands. In most places, those days are long gone. The business model for selling gas has changed. Now the same thing is happening to another industry: Internet Service Providers (ISPs). However, just as many folks weren't at all happy with the transition to self-serve gasoline, lots of you are not happy with new trends in the ISP business, either. I recently received email from a reader named Jim, who reported that his ISP has stopped providing email services for their customers and are now "farming it out to Google." A few days later, a friend complained that Time Warner/Roadrunner has "eliminated Usenet newsgroups." None of these people were happy about the changes. As the first one said, "I asked how much they are lowering my cable bill, but got no response ...". Unfortunately, this practice of getting less for the same (or a higher) price seems to be increasing in popularity far beyond the ISP industry. In the early days of ISPs, they presented themselves as "full service" companies. When you bought an Internet access account, you got more than just access. You almost always got an email account (or several), access to the ISP's NNTP (newsgroup) server and all of the newsgroups that it carried, and a few megabytes of free space on their web server, where you could put up your own web page. Even though none of those extra services were really part of Internet access, any more than cleaning your windshield is part of selling gasoline, customers came to expect that level of service. Those customers get pretty irate when you take away something they've come to see as part of what they're paying for. On the other hand, we have all been paying for those extra services from the beginning, whether we used them or not. My husband and I run our own Exchange mail server and our own web servers on site, and we've subscribed to Giganews (a paid newsgroup service) for a decade. The free mail accounts and web space and news services that came with our Internet access accounts went unused. And in fact, more and more people now use Gmail or Hotmail or Yahoo Mail accounts instead of the POP accounts provided by their ISPs, because it's more convenient (they can get their mail from any computer using the webmail services, without having to configure an email client) and it's free. Usenet has declined in popularity over the years as web boards and peer-to-peer file sharing have emerged to serve the same purposes (and for most people, are easier to use). Dedicated newsies already use the for-pay newsgroup services because those services carry more groups and are often hosted on faster servers than the ones that are run by ISPs. The few free megabytes of web space an ISP grants you doesn't go very far when you're building today's multi-media laden web sites; besides, if you're serious about a web presence, you're going to want to host your own server or use a hosting company that will allow you to register your own domain name. However, even as customers' use of the extra services has fallen, the cost to the ISPs of providing them has increased - both in terms of money and increased risk and liability. With energy costs through the roof, running those servers is more expensive than it once was. In addition, if you don't provide email services, you don't have to worry about law enforcement coming in with a subpoena, demanding to see some customer's messages. Likewise, if you don't run a web hosting service, you don't have to worry about some customer putting something illegal on his web site that sits on your server. As a mere carrier providing bandwidth, the law is clear that ISPs aren't responsible for content. When they host services, it gets a little stickier. In fact, one of the reasons that ISPs are giving for dropping Usenet is the recent actions of the New York attorney general. He's been targeting Usenet for disseminating child porn, which resulted in the major ISPs signing an agreement to block such groups from their servers: http://www.vistanews.com/UZW5YW/080703-Usenet-Groups Since policing hundreds of newsgroups is an impossibility, some ISPs find it easier and much more cost effective to stop providing the NNTP service altogether. They argue that those customers who want legit newsgroups can still get them, through the for-pay services. Speaking of "the major ISPs," there's another way in which Internet service providers are like gas stations: in decades past, there were local "mom and pop" stations on every corner, and small local ISPs serving most areas. Now the vast majority of gas stations are affiliated with the big oil companies, and most of the small ISPs have been run out of business by the telecoms, cable companies and big national providers. This decrease in the amount of competition means many customers are more or less locked in to a particular provider. In some geographic areas, you may be lucky enough to have a few choices, but those choices are usually between a handful of large providers such as Verizon, AT&T and Time Warner. This creates a "triopoly" situation where those providers can do pretty much what they want, regardless of customer desires, if they stick together. We've already seen an example of that after Time Warner tested the waters with tiered/metered Internet service. Soon after, AT&T started talking about doing the same. Perhaps there is some hope in the fact that Verizon has a history of having bucked trends before (they were the only major wireless phone provider to refuse to join the other five in creating a U.S. cell phone "411" directory service). At this time, Verizon's residential broadband and FiOS accounts still include email services (9 accounts) and web hosting (10 MB). And they still provide an NNTP server, although they no longer carry the alt.* newsgroups. Still, I think we can expect to see fewer and fewer services provided by ISPs as government regulations tighten and their costs go up. With that combined "double whammy," it makes business sense for them to stop offering "free" services that only get them in trouble. -- Ray Barkalow - First Rays Orchids - www.firstrays.com Plants, Supplies. 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