Personal Computing

October 1999
by Reid Goldsborough

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The Gold Rush of 1999 has begun. Unlike the California Gold Rush of a century and a half ago, this one
is for the rich surfing experience made possible by high-speed modems.

It’s also a race for the wallets and pocketbooks of consumers-both individuals and businesses-who
have been complaining about the World Wide Wait and are willing to put their money where their mouths
are.

Both high-speed or broadband Internet service cost a premium over the $15 to $20 per month that
conventional service typically costs. But there’s good news here. With the increasing availability of
digital subscriber line (DSL) Internet connections from telecommunications companies, cable modem
companies now have real competition. This should put pressure on both industries to keep prices low.

Each industry has a poor reputation regarding pricing. Cable companies, without meaningful
competition, have routinely jacked prices up for cable TV services well beyond the rate of inflation.
And phone companies could already have owned the broadband market had they priced earlier ISDN
services affordably and not been afraid of cannibalizing their lucrative T1 and similar business-class
services.

The reluctance to forgo fat profit margins to grow its customer base was ultimately what did in
CompuServe, once the leading online service and now just a faltering bit player owned by America
Online. This may eventually do in some of the old-guard telecom giants as well. Already the Baby Bells
are facing…IBPA Members – Click here to view the full article (login required).

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