Small Internet Providers Blossom despite Growing Competition

By Matt Kempner Cox News Service | THE JOURNAL RECORD, October 31, 1996 | Go to article overview

Small Internet Providers Blossom despite Growing Competition


Matt Kempner Cox News Service, THE JOURNAL RECORD


ATLANTA -- Conventional wisdom has it that tiny local companies that link homes and businesses to the Internet should have closed shop and cashed out by now.

AT&T, BellSouth, MCI and other multibillion-dollar Goliaths are muscling in on the turf held by these small companies, and industry analysts predicted that 1996 would bring a massive die-off or consolidation in the ranks of small businesses providing access to the Internet.

So far, just the opposite has happened. At least 11 metro Atlanta-based Internet service providers -- known in high-tech lingo as ISPs -- started business in the past year, effectively doubling the local industry's size. While surveys and statistics are skimpy in this relatively new market, no one is arguing that the industry is growing here and nationally. The latest count shows 2,900 ISPs in the nation, up from 1,400 nine months ago, according to an unpublished survey by Boardwatch Magazine, which covers the industry. Nationally, only 13 of the companies surveyed by the magazine had more than 15,000 subscribers each. Half have 400 or fewer subscribers. They often start in home basements, lease access to a high-speed fiber optic Internet connection, employ part-time technicians and rely on a few hundred or thousand subscribers. The boom ensures that, at least for the time being, Internet access is a buyer's market, with falling prices and dozens of competitors from which to choose. It also underscores entrepreneurial confidence that the Internet will continue its stunning growth and that the presence of corporate giants won't squeeze out little start-ups. There is still plenty of room to grow. Only about 10 percent of American homes are hooked to the Internet. And owners of the smallest ISPs contend the dust kicked up by the telecommunications giants increases the Internet's popularity and funnels new subscribers to all well-run access providers. "You have this big window of opportunity people will try to jump through," said Kevin Hosner, the president of Interlinks Online, a year-old ISP based near Athens, Ga.

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