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High Broadband Penetration Makes Life Tricky for Small ISPs

7:00 am on June 26, 2006 | Category: Business, Internet, Telecom Services

With telecom and cable companies dominating North Americaâ€™s broadband internet industry, companies that describe themselves as standalone ISPs have suffered a significant decline in sales and profits.

The giants of the communication industry spent most of the 1990s building high-speed networks, while standalone providers continued to offer simple dialup access. Now that most dialup users have switched to broadband, survival is a difficult proposition for many ISPs.

“The state of the independent ISPs today is a sad one,” said California ISP Association president, Dane Jasper. “What we are selling today is by and large a commodity. Fast Internet is fast Internet.”

This cruel reality is causing dialup providers to beef up their presence in other markets, rather than depending solely on a dying industry for revenue.

AOL, for example, is attempting to break into the broadband market, while beefing up its presence in web-based email and internet advertising. United Online, meanwhile, which owns Juno and NetZero, has bought the MyPoints consumer loyalty program in an attempt to enter the incentive marketing industry.

EarthLink has taken an especially innovative approach, managing citywide mesh Wi-Fi networks for a number of major American cities.

There is little doubt that if independent ISPs are to survive, they need to distinguish themselves, and become associated with a specific niche market. The ones that donâ€™t will simply end up as road kill on the information superhighway.

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