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VOL. 115 | NO. 107 | Wednesday, June 6, 2001

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The doggy-dog world of ISPs Local ISPs stay afloat in shark-infested waters By SUE PEASE The Daily News A few years ago, Internet service providers were working at a fast and furious pace to gain as much market share as possible. But these days, many ISPs are just trying keep their head above water, while others are enjoying the business left behind by those that have sunk. Take, for example, PSINet, which a little over a year ago was acquiring smaller companies, building its network and even putting its logo on the Baltimore Ravens stadium, but last week filed for Chapter 11 bankruptcy. BlueStar Communications based in Nashville, Tenn., entered the ISP market in 1997 and since then merged with Covad Communications. Last week, Covad received notice from Nasdaq it could be delisted from the exchange. It seems in the world of Internet connectivity, business potential is great, but so is risk. So, what is an ISP to do? On the local front, private ISPs are dwindling, but the ones who remain are strong. For Memphis ISP, WorldSpice Technologies, the key to survival and success is all about customer service. While underlining customer service as the key ingredient to success may sound cliche to some people, Paul Tomes, president of WorldSpice, considers it the most important factor. "Customer service is the defining factor. In the end, that is really all you sell," Tomes said. "Everybody has access to the same equipment. They have access to the same technology. So, its how you take care of your customer before and after the sale, particularly after the sale thats important." WorldSpice has been in business since 1994, which by many standards is a millennium in Internet years. The company caters to the business community. It offers full and fractional T1 service, digital subscriber line, fiber optic connectivity, integrated services digital network, broadband wireless and some dial-up connectivity, along with Web hosting and co-location services. The cost of business services ranges from $150 to $800 a month, depending on the technology package. Quickly adding customers no matter what the cost is another factor that doesnt seem to bode well in the ISP world. "Their business model was based on the number of circuits and raw number of customers rather than revenue," Tomes said. Another business-class ISP is Broadslate Networks. It is a regional company, based in Charlotte, N.C., and entered the Memphis market in August. It has added 180 subscribers and offers symmetrical DSL service, e-mail and Web hosting. The company offers bandwidth from 144 kilobytes to 2.3 megabytes. Prices range from $149 to $649 per month. It also offers a service it calls E-loop, which allows customers who are at extended distances to gain DSL access. Broadslate is a privately held company started about two years ago. Account executive Brian Capo said customer service is important, but said the business continues to grow because of its symmetrical DSL product. "We do one thing and we do it very well," Capo said. "Weve got good funding. Weve got a good product and a good business plan and thats why we are still here." Synapse is another local ISP that continues to be a player in the market. Company president Robert Staub leans toward customer service as being the factor that keeps ISPs afloat. "In this business and Ive been doing it a long time it is all about relationships," Staub said. "Youll always have a big player coming in. They have a lot of money and they will throw it at the market. Its kind of like throwing mud on the wall, some of it will stick and some of it wont. It all comes back to providing the product and backing that up with service," he added. The biggest segment of the companys work is providing service for businesses and it provides dial-up service, ISDN, DSL and T1. Prices range from a low of $18 per month for dial-up to $500 month, depending on the service package. The company also offers Web application development services and prefers to call itself an "Internet Technology Provider." Along with many national companies leaving the marketplace, there are local ISPs leaving, too. But Staub thinks there are still many benefits to doing business with a local ISP. "We are locally and privately owned and we can turn on a dime. If the technology changes we can move quickly. We dont have to go to our board of directors or address our stockholders. We make the decision that it is a good technology, a good change to make and we do it." The technology will always be changing, but for many of the local ISPs, its the quality service that provides the success. As WorldSpices Tomes said, "the technology has almost become secondary."

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 115 270 19,843
MORTGAGES 141 311 23,225
FORECLOSURE NOTICES 35 83 8,387
BUILDING PERMITS 0 338 40,366
BANKRUPTCIES 74 196 13,300
BUSINESS LICENSES 25 48 6,185
UTILITY CONNECTIONS 40 125 13,120
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