Internet Service Provider (ISP) - Major Providers For Consumers And Businesses

MAJOR PROVIDERS FOR CONSUMERS AND BUSINESSES

As electronic commerce became more widespread in 1999, corporate customers favored ISPs that could provide audience reach. According to a mid-1999 survey by Data Communications, UUNET serviced 178 of the 500 largest domains, followed by Exodus Communications Inc. and Cable & Wireless Inc. UUNET also handled a large number of dial-up users on behalf of major consumer ISPs such as America Online, GTE, and Earthlink. Another 1999 survey of ISPs by Inter@ctive Week found that BellSouth.net, UUNET, IBM Global Network, MindSpring Enterprises, and AT&T WorldNet were leading ISPs for business customers. According to the survey, key factors in selecting an ISP for business users were reliability, network performance, cost-effectiveness, customer service responsiveness, network capacity, and technical support.

According to a 2000 survey by Inter@ctive Week that measured customer satisfaction among business users, the top four national ISPs were MindSpring, EarthLink, PSINet, and UUNET. Regional ISPs as a group ranked fifth. While weak in network reach and brand awareness, regional ISPs scored well in getting their customers' service up and running, customer service responsiveness, value for price, and network reliability. Value for price and network reliability were the two most important factors in choosing an ISP, according to the survey. A 2001 survey of ISPs for corporate customers by Network Magazine ranked Cable & Wireless, AT&T, and UUNET as the top three national ISPs.

Inter@ctive Week ranked the following ISPs as the top five among consumers in mid-2001: EarthLink, Excite@Home, The Microsoft Network, Prodigy Communications, and America Online. At the time the survey was conducted, America Online was the largest ISP for consumers with 23.2 million subscribers. EarthLink had 4.7 million subscribers. By 2001 EarthLink was pursuing a broadband strategy; the company was under contract with Time Warner Cable to deliver Internet access over cable into 20 million homes. From 2000 to 2001, EarthLink experienced a 760 percent increase in the number of DSL customers and a 0.2 percent drop in dial-up customers.

In the early 2000s, the Microsoft Network boasted nearly 5 million U.S. subscribers and was expanding globally, while Excite@Home had 3 million home subscribers. Much smaller in terms of revenue and subscribers, Prodigy Communications was accessible to more than 90 percent of the United States. Prodigy had strategic partnerships in place with Covad Communications and SBC Communications to boost its DSL resale business. The company claimed to be the largest DSL retailer with 600,000 customers.

By 2001 ISPs providing free Internet access were having difficulty surviving. While offering free Internet access could succeed in gaining new customers, anticipated revenue from advertising, electronic commerce, and connect fees proved disappointing. A report from Jupiter Media Metrix stated that the free ISP business model was not sustainable. Toward the end of 2000 several portals terminated their free ISP services, including Alta Vista and Terra Lycos. In mid-2001 NetZero, the last pure-play free ISP, announced it would merge with Juno Online Services to form a new company, United Online, which would continue to offer free Internet access under the NetZero brand. Later NetZero announced it would reduce the number of free Internet hours from 40 hours per month to 10 hours per month. The company also reduced its staff by 26 percent.

Kmart's BlueLight.com managed to purchase the assets of the infrastructure provider for its free Internet access service in order to keep its customers online in 2000. After introducing a two-tier model of 100 hours of online access for $9.95 per month or 12 hours of access per month for free, BlueLight.com discontinued its free Internet access service in July 2001. Instead, the company offered unlimited access for $8.95 per month and gave customers the opportunity to get free Internet service in return for buying products at the BlueLight.com Web site.