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	Rex Ballard - Director of Electronic Distribution
	http://cnj.digex.net/~rballard


On Sat, 26 Oct 1996, SCCM e-zine wrote:

> Microsoft's management was quoted in a C-Net interview as saying: 
> "We need to be in competition with ISP's and we are preparing
> for the day when the phone companies offer internet access for free."

For Microsoft, there is a bigger spectre.  It is highly likely that for
primarily economic reasons, telephone companies will be converting that
last quarter mile to a high bandwidth medium such as Frame Relay or FDDI.
This has as much to do with the cost of managing 25 pairs of analog copper
wire vs. the equivilent of an ethernet hub.

What ends up in the house?  It could be a simple box that looks like a
modem and delivers telephone to the phone and video to the TV, or it could
be a small Unix Box with cheap disk drives that powers down the disk drive
when no one is connected.  It could be a NetWorkstation with no disk drive
and completely dependent on the remote network hosts.  Or it could be a
$3000 PC with Windows NT 4.X on it along with $2000 of Microsoft Software,
paid for by "Advertisers" (Merchants who don't want to be shut out of this
market).

The biggest thing standing in the way of the "Microsoft Solution" is that
85% of the ISPs are running Unix or Linux.  A high school kid can set up
a Linux Server and become an ISP (I've helped a couple do so).  Right now,
the biggest barrier to being a full time provider is that ISDN callback
charges (inbound connections made by the ISP to the local server) can
quickly get out of hand, and Frame Relay is a substantial cost to set up.

The cable companies could easily pump 10-base-5 ethernet through all of
that coax cable.  Simple ethernet hubs could wire entire apartment
buildings using existing wiring.  With this cheap and easy access, the
advertisers would just put up their own sites, include interesting
content, and referr users to other content.

> Two years ago I made the statement that the public would have free
> dial up internet access.  And yes...it is only a short time away.

Actually, nothing is free.  On the other hand, we might be spending the
$20/month we currently spend for analog access on digital access instead.
Instead of geting a second line, we'd just get more bandwidth.

> As a matter of fact, if Bill Clinton is re-elected prez of USA, there shall
> be free internet access within the next 18 to 24 months.

Don't count on it.  Gore has been pushing a "Government sponsered, no
commerce allowed" version of the internet since Bush was elected.  The
current internet is self-funding.  Clinton/Gore would like to see the
research/technology "Protected" from the commerce and general public.

The real power of the internet came from the Synthesis of Research
(National Science Foundation Network), Commerce (Web Hosts), and consumer
access (equivalent to Fido/Wildcat and X.25).

> Is there a future for the small to medium size ISPs?  Yes...in two words...
> Cause Marketing.  Will the gov't subsidize their business?  Yes...but, it
> will also subsidize the big boys!  

Why isn't every retail store like Wal-Mart?  Why isn't every restaurant
like McDonalds?  Smaller niche stores, boutiques, diners, coffee shops,
shops and restaurants thrive against competition from the franchise
giants.  Even the chains are mostly independent franchises.

The broad base of ISPs and their ability to serve the customer effectivly
with a custom blend of services make the potential for a Telco monopoly
unlikely.  The telcos can't squeeze too hard either because of competition
in the digital carrier markets.  It's a "Mexican Standoff", the first one
to pull the trigger is guaranteed not to survive.

> Moral of the story: The early bird gets the worm.  

There is still massive potential available.  We have only scratched the
first few layers of the surface.  The Internet, in all it's forms and
names could cause an increase in GGP (Gross Global Product) of over 20
percent per year.  This is part of the cause for substantial growth
without significant inflation.  Information flow causes cash flow.

> Michael McPherson
> Editor & Publisher
> SCCM e-zine
> Social & Charitable Cause Marketing
> 
> 
> +---------------------------------------------------------------------------+
> Posted to ONLINE-NEWS. Made possible by Nando.net - http://www.nando.net
> 


From rballard@cnj.digex.net Tue Nov  5 23:34:00 1996
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