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
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.
~$25US $0.74US note:$25 telco + $0 ISP
~$34US $1.01US note:$25 telco + $9 ISP
Roeland M.J. Meyer, CEO
Software Company, Inc.