Steven J. Vaughan-Nichols (sjvn@access.digex.net)
The days of numerous tiny ISPs (Internet service providers) may be ending. Many midsize cities have four or more regional Internet providers, in addition to BBSes that offer Internet services. But observers predict there will soon be a consolidation of these providers.
The first steps toward Internet-provider consolidation have already been made in the U.S. On the national level, for example, on-line service CompuServe (Columbus, OH) recently purchased popular Internet software and service provider Spry (Seattle, WA).
Jeremy Allaire, president of New World Media (Minneapolis, MN), an on-line systems and Internet analysis group, says this buy-out is consistent with the revenue-generating models of major on-line services. With the acquisition o
f Spry, CompuServe will provide full Internet World Wide Web-based access through its network. "CompuServe bought Spry to acquire the software that they give away for free, but the model remains the same," Allaire says. "They make money [by] selling the user a data line."
Meanwhile, long-distance providers and the regional Bell companies are moving into the Internet market. MCI, for instance, recently rolled out its InternetMCI service. Pacific Bell has announced that, in partnership with CompuServe, Intel, Microsoft, and 3Com, it will offer combined ISDN and Internet services. "I think we'll see the vast majority of users accessing the Net through a small set of providers, in the range of 20," Allaire says. The remainder, he adds, will likely survive by providing expertise and infrastructure to local media companies (i.e., TV or radio stations) or businesses that want to set up Web pages.
Service Providers Consolidate
