John Linton
Annette raised a question over lunch yesterday about the situation with new ISPs and the apparent lack of new ISPs offering ground breaking plans and options that has been the case in Australia since Microtex, which became OzEmail, first offered their email service in the late 1980s? (or was it early 1980s?).
Neither of us have paid that much attention to the lower/smaller end of the ISP market for some time but we continue to run across statements in various press reports of there being "over 800 ISPs in Australia" and that "a consolidation of the ISP industry will be taking place in the near future" (always a favourite of mine because how could anybody have any idea about the timing of such an event?). However, Sunday lunch at a favourite Chinese restaurant is a suitable time and venue to discuss such an amorphous subject and, in the absence of anything else more immediately interesting or stimulating, we chatted about it for a while.
The first thing that becomes immediately apparent when you attempt to remember things that you are sure you know intimately is that your memories seem to be vague and confused or you have forgotten entirely. It took a while for us to piece together a basic chronology of the various companies that have come and gone since our arbitrary starting point of Microtex as being the first 'ISP' with our guessed start date of 1987 (probably decided upon because it was exactly 20 years ago which appeals to a sense of neatness).
Anyway it seemed that if Microtex/Ozemail was the first Australian ISP then we knew that its demise date was 2006 when it was bought out, for the second time, and shortly thereafter the OzEmail name was gone from the Australian industry. A pretty good run in existence terms by subsequent ISP standards. It was also, by far, the largest ISP to disappear though that is not really true as its US owners (MCI/Worldcom) had to sell it to obtain money to prop up their globally failing comms business rather than because OzEmail was insolvent - so when you think about it - Ozemail achieved another 'first' in the last transaction of its corporate life to go along with first Australian ISP, first Australian ISP to list on the NASDAQ, first ISP to list on the ASX, first ISP to make multi-millionaires out of its founders - and I'm sure there are many more firsts.
However I'm digressing almost as much as if I was still at lunch.
Other notable disappearances included iHug (an NZ based company with the temerity to try their Kiwi luck in a real country who got absorbed by iiNet then spat put by iiNet and retreated to NZ), the strangely ambitious DavNet (a company that pioneered wireless for data in CBDs who got some financial backing and went public, got into trouble, got bailed out by NTT, got into more trouble and the remains were absorbed in to Powertel), the Packer (or was it News Ltd?) funded Comindico who rolled out an Australia wide network to 66 cities on very generous deferred payment terms from Cisco before going spectacularly broke and doubtless others that neither Annette nor I could remember. All of those companies either were of very real size or had very real infrastructures and cutting edge ideas and ambitions.
If there were "over 800" ISPs in Australia in 1996 (and I'm pretty sure there weren't but that statement keeps appearing without any real information source/attribution) there probably are "over 800" companies claiming to be 'ISPs' today but probably all but 30 - 40 of claimed ISPs are simply VISPs (broadly defined as small organisations who have no real investment in the business who 're-package' internet plans packaged by other larger companies) and who come and go by the dozens every few months.
I may well be biased but I think the last ISP that survived more than a couple of years that introduced some sustained 'differences' in to the ISP industry was Exetel in 2004 (you may well argue that DODO is a major innovator but I just can't bring myself to consider that company seriously - again clearly my personal bias). At the time Exetel was created there were several 'larger' ISPs that had been around for a year or so that subsequently disappeared and there were hundreds of 'ISPs' whose names appeared briefly over the past 4 years and then disappeared without a trace.
Independent ISPs that have remained in business for more than three years (of which Exetel is one of the smallest) don't seem to be very innovative any more with al of the real innovation coming from the very large ISPs and I include BigPond in that assessment. If you want a shortish contract, value for money and have a need for downloads in excess of 2 gigabytes then an independent ISP still provides the best and lowest cost solution. However if you want less than (and it's an arbitrary figure) 2 gb and don't mind a longish contract (you're a long term renter or you own your own house) you will almost certainly find a lower cost (often much lower cost) solution from Optus, Telstra or even AAPT.
....and I think this explains why there are no more start up ISPs and why the independent ISPs that remain are all a bit "ho hum" - Telstra and Optus have taken over providing innovation at very low pricing which leaves the current independents and any enthusiastic new player with almost nothing to offer!
At this stage we had finished the wine and the meal and started the long walk home in the surprisingly warm winter sunshine and decided we would think about the implications some other time.