Aardvark Daily aardvark (ard'-vark) a controversial animal with a long probing nose used for sniffing out the facts and stimulating thought and discussion.

NZ's leading source of Net-Industry news and commentary since 1995
Australasia's "New Economy" News And Commentary Site
Headlines | XML feed | Contact | New Sites | Press Bin | Job Centre | News Search | For Sale
Note: This column represents the opinions of the writer and as such, is not represented as fact
Who'd Want To Be An ISP? 29 January 2002 Edition
Previous Edition

Million $ Ideas
At last, the contents of Aardvark's "million-dollar ideas" notebook are revealed for all to see!
Click To See
Are independent ISPs becoming an endangered species?

After all, it's just a few months ago that we saw one of NZ's oldest independent ISPs (Asia Online, formerly ICONZ) go belly-up.

Are we going to see more closures or failures in the ISP business?

Has the marketplace become so cut-throat and lacking in margins that only the big players such as XTRA and Telstra/Clear can survive?

Need Cutting-Edge Copy?
As NZ's longest-running online commentator, I'm looking for extra syndication opportunities for this daily publication -- or I'm happy to write casual or regular material specifically to order for print or Net-based publications. If you're interested, drop me a line

I mean to say -- who'd really want to be a small ISP anyway?

Right from the early days it wasn't hard to see that trying to run an ISP business in a country where the PSTN was owned by a monopoly, and the market for other essential data services were effectively ruled by a duopoly, would be damned hard work.

Of course this situation hasn't improved any with the arrival of DSL services which are, for 99 percent of the country, yet another monopoly owned by Telecom.

Readers Say
(updated hourly)
Nothing Yet
Have Your Say

It was always obvious that once Telecom itself got a sniff of the fact that there might be money to be made from these crazy kids and their computers, then they'd also get in on the ISP game.

Now you don't have to be a brain surgeon or rocket scientist to figure out that if the company which controls the local loop and has the lion's share of the bandwidth market is going to get into the game at a retail level then other, independent ISPs were going to have a very hard time of it.

Telecom and XTRA will tell you until they're blue in the face that XTRA gets no special treatment over and above any other ISP when it comes to PSTN access or data-circuits/bandwidth -- but do we believe them?.

The battle over 0800 numbers back in 1996 certainly cast more than a little doubt on the veracity of those claims.

A similar situation arose more recently when Telecom decided to force ISPs to use the 0867 system for dial-up accounts -- XTRA certainly seemed to be at an advantage compared to the independents.

As predicted, XTRA (largely due to having Telecom as its parent) has rapidly grown to become the country's dominant ISP, reaching its first 100,000 users in April 1998, and now claiming a massive 340,000 customers.

All of this has made life hard for the small independent ISPs -- of which there are far fewer now than there were six or seven years ago. The fact that so many are still in business is really quite amazing -- particularly in light of the "free ISP" situation we had a year or two ago.

And now we have another hassle for ISPs -- the consumer guarantees act.

According to reports, emails are to be classed as goods under the act, meaning that ISPs could find themselves caught in a rather unenviable situation.

As I understand it, the Consumer Guarantees Act (CGA) applies to goods and services primarily purchased for non-commercial purposes. It provides a range of protections against fraud and bad practice and many of these provisions can't be contracted out of.

By comparison, the laws pertaining to the sale of goods and services for commercial use are somewhat different and allow significantly more ability for its provisions to be waivered by terms and conditions explicitely added to the sale contract.

Now you can bet your bottom dollar that the providers of data and other services to ISPs will have carefully worded contracts that effectively reduce their liabilities to the bare minimum allowed by law. Since some of those services (such as access to the PSTN) are still a Telecom monopoly, ISPs will have no option but to accept such disclaimer-filled contracts.

However, the ISP may be in no position to pass on such disclaimers to its non-commercial customers. Not only is the retail Internet access marketplace a competitive one, but there's the higher level of implied consumer protection provided by the CGA.

When a domestic customer incurs a loss because one of their emails isn't delivered due to a fault with an ISP's supplier, a denial of service attack or whatever, the ISP may well find themselves well out of pocket in remedying those losses under the CGA. Unfortunately, they may not be able to recover anything from the party really at fault because they were forced to sign all those disclaimers and waivers in order to obtain the service in the first place.

But wait -- there's more.

If Telecom's market dominance and the CGA doesn't get you, the cost of complying with inevitable snooping legislation and fending off defamation suits will -- sooner or later. Although we've only got the O'Brien versus Brown case here in NZ and as far as I'm aware, the liabilities of ISPs has not yet been tested, a British case would suggest that they could be in the firing line sooner or later -- after all, much of our law seems to hold more parallel with Britain than the USA.

So -- how bleak is the future for the independent ISPs?

Well I figure that those who have survived up to this point are either incredibly tough and good at what they do -- or a division of Telecom NZ. Maybe we've lost the also-rans -- but I think I could find 101 better things to invest my retirement money in right now.

It's Still Free -- So Pay Up!
Every month, Aardvark scores over half a million hits, at least 150K page views and delivers more than 6GB of data to visitors.

All this traffic has meant that I've had to shift the site to a new server to ensure that your daily dose is always fresh and delivered to your browser with minimal delays.

I also invest over 300 hours per year writing the daily column and compiling the day's news index -- all for your illumination and entertainment.

If you haven't sent any money to help offset the costs of running this ad-free, 100% Kiwi, always fresh, often controversial site then you can give yourself the warm-fuzzies this Christmas by doing so now.

Just drop by, click on the Aardvark, and hand over your loot.

Add Aardvark To Your Own Website!
Got a moment? Want a little extra fresh content for your own website or page?

Just add a couple of lines of JavaScript to your pages and you can get a free summary of Aardvark's daily commentary -- automatically updated each and every week-day.

Aardvark also makes a summary of this daily column available via XML using the RSS format. More details can be found here.

Contact me if you decide to use either of these feeds and have any problems.

Did you tell someone else about Aardvark today? If not then do it now!

There are 2 new Vacancies (14 January 2002) In The Job Centre

There are 14 Domain Names for sale

Latest
Security Alerts
Admins asked to check buggy line printer daemons (AAP - 08/11/2001)

New vulnerability exposes Excel and PowerPoint macros ZDNet - 29/10/2001)

Microsoft tightens software security (CNet - 16/08/2001t)

Code Red Worm A 'Runaway Success' (7amNews - 20/07/2001)

Latest
Virus Alerts
Gigger worm can format Windows PCs (The Reg - 11/01/2002)

Happy New Year' worm hits Windows (ZDNet - 19/12/2001)

E-mail worm Gokar spreading (CNet - 13/12/2001)

Bookmark This Page Now!

 

MORE NEWS
NZL Sites
IDG.Net.nz
NZ Netguide
NZ Herald Tech
PC World NZ
Scoop
NZOOM Technology WordWorx

AUS Sites
Fairfax IT
Australian IT
AFR Tech
AUS Netguide
NineMSN Tech
APC Magazine

USA Sites
Wired.com
CNet
CNNfn Tech
TechWeb
Yahoo Tech
ZDNet Tech
USA Today Tech
7am.com SciTech

UK Sites
The Register
BBC SciTech

 

The Day's Top News
Open in New Window = open in new window
New Zealand

Open in New Window Double price rise in Oz, but still cheaper
Even though Telstra has raised the price of its Australian DSL-based fast internet service twice in the past month, it still appears far cheaper than Telecom's JetStream...
IDG

Open in New Window Telecom dumps subsidy on mobile phones
Telecom has followed Vodafone's lead and dumped subsidies on mobile phones...
NZ Herald

Other

Open in New Window New E-Mail Worm 'My Party' Surfaces, Begins to Grow
A new computer bug that tries to trick computer users into clicking on a virus-infected Web link masquerading as party photos emerged in Asia on Monday and began spreading to Europe and North America, computer experts said...
Yahoo/Reuters

Open in New Window U.S. leads in launch of cyberattacks
More cyberattacks originate in the United States than in any other country, but the number of attacks that appear to come from Israel is nearly double that of any other nation based on the number of Internet users, according to a study released on Monday...
CNet

Open in New Window When screensavers are a crime
The next time you install software on your computer at work, you could be facing criminal charges...
BBC

Open in New Window W3C publishes patent proposal
The World Wide Web Consortium has published a new proposal for handling patent issues in its standards...
CNet

Open in New Window Open Source's Dot-Net Less Open
In a move designed to encourage corporate participation in offering up code, developers of the Mono Project, an open-source version of Microsoft's .Net initiative, are switching licensing standards...
Wired

Australia

Open in New Window Australian IT workers to Unions: pull the other one
The NSW Labour Council may have a tough time convincing Australian IT workers to carry union cards despite a recent surge of job losses through the industry...
ZDNet

Open in New Window Tax changes attract funds
UNITED States investment funds - attracted by a change in tax laws - will spur the Australian venture capital market this year, providing an inflow of investment for local start-ups...
Australian IT

Other

Open in New Window Crippled Athlon XP-2000 beats Northwood P4
I'd love to tell you how the Athlon-XP performs at its proper 1675MHz clock speed, but the new Gigabyte 7VTXE mobo we were sent was so severely hobbled that 1265 was all I could test Linux and Windows on reliably...
The Register

Open in New Window Morpheus application is 'safe'
Morpheus, the music and file-sharing application, is free of malicious code - although individual downloaded files carried by the service may be contaminated...
The Register

Open in New Window Taming E-mail Overload
With spam (as "junk" e-mail is known), mailing lists (which send indiscriminately to a large number of selected people), forwarded jokes, inadvertent "replies to all" and actually useful mail, many people now receive 60 to 80 messages per day...
ABC News

Open in New Window Computer Attacks On Companies Up Sharply
Cyber attacks are becoming more common and targeted, according to study to be released today, and security experts warned that the trend is only going to increase...
NewsBytes

Open in New Window IBM's Lotus family wakes up with Java
IBM's Lotus Software unit is retooling its family of e-mail, messaging and collaboration software with a big dose of Java...
ZDNet


Looking For More News or Information?

Google
Search WWW Search Aardvark

Privacy Policy | Copyright © 2001, Bruce Simpson, republication rights available on request

jet engine page