Nov. 27, 1997
By Tony Fong
Copyright © 1997, The Syracuse Newspapers
Once, unlimited access to the Net was the sole domain of companies known as Internet service providers.
Then America OnLine and other online services horned in, offering unmetered access to the Net for about $20 per month.
With flat rates, unlimited access and proprietary networks that made the Internet manageable for the fledgling hacker, it seemed online services were in a position to suck up the customers and suck the life out of smaller providers or ISPs.
But almost a year after the move by online services, ISPs in Central New York are reporting a growing base of subscribers and little fear of the online computing equivalent of the great white shark.
To be sure, America OnLine remains at the top of the food chain in online computing. Even before the announced merger between AOL and CompuServe, AOL had a customer base of 9 million. With the merger, it now adds the 2.6 million CompuServe subscribers to its list. MSN Network, the third most popular online service, has 2.3 million subscribers. The three together control 58 percent of the estimated 24 million Americans who are connected to the Internet.
By comparison, Dreamscape Online, probably the best-known Syracuse-based ISP, has a little more than 6,000 customers. However, that number represents an 1,800 percent increase from a year ago, said Scott Brennan, president of the company he founded in 1991.
Some of the growth of ISPs can be attributed to the continually expanding number of computer users. According to census data, the number of households with computers grew from 13.7 million in 1989 to 22.6 milion in 1993, the last year data was available.
A survey released last month by Odyssey, a San Francisco market research firm, found the percentage of U.S. households that are online has nearly doubled in the past two years to 19 percent.
ISPs are convinced that AOL's problems have also helped their businesses.
Image is everything
Unlike online services, which offer proprietary networks, ISPs offer connections only to the Internet, usually at a flat rate. For years, online services usually charged on an hourly basis.
Then, in January, AOL announced it was offering a flat $19.95 monthly fee. Other online services soon followed, in effect taking away one of the biggest advantages ISPs had over online services.
While there was some concern among the ISPs about AOL's move, there was also skepticism.
"Actually, I was quite happy," said Frank Caruso, president of SCC Telecommunications. "I knew that from a supply-and-demand standpoint their network would not be able to facilitate the additional usage and we would see additional migration to our company."
The most immediate problem created by AOL's move was the overload to its system created by all the new subscribers who rushed to sign on to the flat-rate plan. That created a logjam, and instead of connecting to the Internet, users were met with busy signals and slow response times.
In the months that followed, AOL scurried to update its network by adding more modems. In large part, the problems have been remedied, but its image continues to suffer.
"I think that's what people are still thinking, even though they fixed that problem," said Dreamscape's Brennan.
Evidence can be found in the survey by Odyssey, which reported that between January and July of this year, those who rated the service of AOL excellent or very good dropped 8 percentage points to 18 percent. Prodigy, CompuServe and MSN also saw their image ratings drop.
Not surprisingly, some who sampled online services eventually returned to ISPs.
"People who come to us don't like AOL because they still get busy signals, it's horribly slow and when they start logging with us they tell us how much faster we are than AOL," said Warren Lavallee, president of Syra.Net.
Choosing the right one
The sheer number of Internet providers can be overwhelming. Across the country there are about 4,000. In Syracuse alone, estimates go as high as 30, not even including ISPs such as American Telephone & Telegraph Co., which serve a nationwide clientele, or the online services.
Despite the past problems of AOL and its lingering effects, it still remains a popular choice for many users. Local providers admit that for those who are just getting connected to the Internet, AOL, CompuServe, MSN and its brethren are still nice primers to the Net.
Their proprietary networks conveniently bundle web sites together by topics, eliminating what can be long and confusing searches, and some information and services found with online services are exclusive.
However, many ISPs now also group together web sites by topic and most of what can be found on the proprietary networks can be found elsewhere on the Net, anyway, though it may be more difficult to find.
For parents of young children, one distinct advantage of an online service is the availability of parental control. Users of AOL can block access to certain web sites, a service not available with ISPs.
The general feeling with many in the computing community is that after familiarizing oneself with the Internet through an online service, it's better to move on to an ISP.
For one thing, ISPs traditionally have provided better technical support - some will make house calls to set up the computer and install programs - and some offer free courses on using the Internet to subscribers.
Depending on where the computer is located, ISPs can also offer cheaper connection to the Net. AOL does not have a local access number in Watertown, so for users there to log onto the network, they need to dial into Syracuse, a more expensive regional call.
When choosing between a local and national ISP, the decision usually comes down to service. While a big ISP such as UUNET and NETCOM On-Line Communication Services Inc. provide adequate service, many users choose local companies for a sense of security.
"If I did have an occasional call, (it was important) there was a local person on the help desk that was able to help," said Mark Barbour, a Dreamscape customer for the past year and a half. "Even though a national organization could have answered the call as well, they would've known more about regional issues."
Speed is an advantage
One clear advantage of ISPs over online services is speed. ISPs connect users directly to the Internet, while a service such as AOL connects its subscribers to the Net only after they have accessed the AOL network, thereby slowing down the connection.
Other factors influence the speed of connectivity: the access speed of the provider's modem, quality of the phone line and the time of log-on. Between 5 and 9 p.m., service is usually at its slowest.
Another factor is the upstream provider used by the Internet provider. The upstream provider is essentially the backbone of the infrastructure that is the Internet. The better the upstream provider, the more quickly it will connect a user to the Net.
One of the biggest complaints of AOL users is the number of times you can't get through. That can be attributed to a high user-to-modem ratio. Simply put, too many users and not enough modems equals busy signals. Most in the industry agree the ratio should be no higher than 10 to 1.
A spokeswoman for AOL declined to comment on its user-to-modem ratio, but said its system has approximately 440,000 modems. With 9 million users, the ratio comes out to 20 to 1. She added the company is adding 25,000 modems each month.
CompuServe, MSN and Prodigy either declined to reveal their ratios or said they didn't keep that information. AT&T, a national ISP also declined comment. A spokesperson for Earthlink Network said their user-to-modem ration was about 15 to 1.
Unlimited, for how long?
A sampling of local ISPs found Syra.Net with a 5-to-1 ratio; SCC Telecommunications 5 to 1; IMC-Net, 8 to 1; InterAxess, 8 to 1; and Dreamscape, 10 to 1.
For now, most Internet providers are offering unlimited use of the Internet for a flat fee, but there are rumblings in the industry that this is slowly being phased out.
In Syracuse, Syra.Net eliminated its flat-rate, unlimited-access plan two months ago when it found too many of its users logging on to the Net, then not getting off it, Lavallee said.
Bill del Solar, director of sales and marketing for IMC-Net, Inc. in Watertown, said flat-fee access is "an artificial rate. It's a pretty thin margin of profitability."
Despite the blooming of ISPs in the past few years, those in the industry say in five years, the vast majority of the 4,000 ISPs that now exist will either die or be absorbed by larger companies, leaving behind a field of 400.
How consumers will fare as a result is not clear.
"Subscribers are always going to have a choice wherever they are in an area," del Solar said. "They just may have to dial a little farther."
Questions to ask
Here are some questions to ask an Internet service provider before you subscribe:
Pricing: What different price plans are being offered? If a flat-fee unlimited plan exists now, are there any thoughts to ending it? If yes, how will that affect subscribers already on the plan?
Background: How long has the company been in existence?
References: How many subscribers do they have? Can you get in touch with any of them to ask if they like the service?
Software: What type of software is included in the subscription?
e-mail: Is e-mail included in the package or is there an extra charge? How many e-mail accounts come with the package?
Technical support: What kind of technical support is there if any problems should arise? A good idea is to call a provider several times a day at different times to see when and how often they pick up.
The ratio: What is the user-to-modem ratio? Most in the industry agree 10-to-1 and below is acceptable. Ask how often you can expect to get a busy signal. If someone says, "Never ever," it's probably too true to be good.
Upstream: Who is the upstream provider? In the July/August edition of Boardwatch, an industry magazine, the seven fastest, and therefore best upstream providers are, in alphabetical order: AGIS; AT&T WorldNet; CompuServe; Genuity; GridNet; SAVVIS and UUNET.
Access speed: What is the access speed? The higher the speed of the provider's modem, the faster data will upload to your computer. Most providers offer at least 28.8 Kbps now and several offer 56 Kbps. For faster speed and a clearer connection, and at a cost, many companies also offer special ISDN connections.
Local or national? Are they a local or national access provider or both? If you need access from different points around the country, using a local provider will cost more in phone tolls.
Mac compatibility: Macintosh users need to ask providers if their packages are compatible with Macs. Ask what tech services they provide for Mac users and how they compare to the service available to PC users.
Word of mouth: Finally, ask other people you know who are connected to the Net about their provider. Word of mouth is often the best way of shopping for anything.