Dominick,
Yes, you bring up an interesting question - the true cost of operating an ISP connection. There is a real cost there, you know. Look at how everyone is reacting to the prospect of MSFT "threatening" to offer "FREE" internet connections, supposedly causing great harm to AOL. Now Microsoft may give them away, but they still have to pay for it. Which means, they would be amortizing the cost of providing internet connections from margin obtained elsewhere, for example selling us overpriced operating system upgrades <G>. But, there is no free lunch.
Regarding Bell Atlantic, they are certainly no model of operating efficiency - I would expect them to have trouble keeping costs down. Look at how all the regional Bells have been bellyaching to the government for years for surcharges on internet access. They have to pay for a lot of the infrastructure that we're using to dial into the net, to our benefit, AOL's, and many other ISP's and they DON'T LIKE IT. So, there motivations may well be eco-political as well. Who knows, the point is they are just the "victims" in the whole paradigm shift, because their business/regulatory environment is not optimized to providing internet access...
Microsoft could probably do it for less, but they can't do it for nothing. If they give it away, they're going to have to cover the loss from somewhere. And I suspect that given their current situation with Uncle Sam, he'd be very interested in what they were up to!
MSFT and AOL are just in this Gigantic war, with AOL buying their old nemises NetScape and pal'ing up with SUNW, you are just seeing the vestiges of gargantuan Corporate Egos shooting back and forth at each other...
-Steve |
