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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here
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To: Kenneth E. De Paul who wrote (4704)7/17/1999 3:41:00 PM
From: E. Davies  Read Replies (1) of 12823
 
You are correct that opening up cable to multiple ISP's will create competition in the service domain.

What services might the ISP's compete on? A typical residential user does not want frills. When I choose a dial up ISP I care about price, reliability, and performance. Others care about customer service.

a) Price
With the majority of the subscription fee going to the MSO, the ISP's will have little ability to compete with each other on price. Maybe someone will find a way to make money from advertizing and take customers without any subscription income. The customer will still have to pay the $25-$30/month to the MSO however *and* put up with the advertizing. I wouldnt choose that.

b) Reliablity
There will never be an issue of busy signals again, so the ISP's dont have this as a point of differentiation. I'll bet that the majority of system failures will be due to factors that affect *all* the ISP's simultaneously. I doubt there will be much ability to differentiate on reliability.

c) Performance
Here there may be some ability to differentiate. It depends on how overloaded the last mile relative to how overloaded the "net" is. There might be some space where ISP's could partition off bandwidth for high performance users and/or provide their own backbone for premium performance. However given the fundamental limit in bandwidth created by the MSO's willingness to spend $ it is going to be hard to do any better than @home is doing already.

d) Customer service.
Ok, maybe some will choose ISP #2 because they do a better job at getting them started on the internet. What of longer term? Why do you call customer service once you are set up and running? Outages or slowdowns mostly. Whos responsibility is this? The MSO again- you get referred to their tech people no matter which ISP you choose.

What other features does your standard consumer care about? My bottom line is that I dont see "opening" the cable wires creating any kind of competitive boom that the consumer benefits significantly from, certainly not on the scale implied by the Fool article. The reason is that the MSO still has the monopoly on the wire. Opening the wire to multiple ISP's has only made the MSO's job that much more difficult.

Business services is a whole different ballgame. @work could use some direct competition.

Comments welcome.
Eric
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