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The Internet America Online The Almighty Buck

AOL Not Alone In Subscriber Decline 232

E-Rock-23 writes "Our registration-hungry friends at the New York Times are running this article with a few more details on the AOL Subscriber Decline, covered in a recent /. post. And it looks like they aren't alone, as Earthlink and MSN are experiencing similar troubles. The article cites a major reason being that users "are buying broadband services offered by cable and telephone companies." Looks like broadband is finally gaining some significant ground with home users..."
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AOL Not Alone In Subscriber Decline

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  • by Deagol ( 323173 ) on Monday February 03, 2003 @10:12AM (#5215044) Homepage
    Let's not forget that the economy is in the crapper. The $20-to-$30/month for a dialup subscription can feed a family for a few more days when things get tight.

    Yeah, broadband is a nice upgrade. But I bet more people disconnected due to money than the need for speed.

    • I think you're right... the bottom line is people can get dial up internet service for $10/month. Even people that actually like using services like MSN and AOL are finding it not worth the extra money.

      Of course, AOL is available to me for free and I still don't use it, but then I didn't recently get laid off.
      • by Anonymous Coward
        Given that my chances of getting a job are seriously linked to my staying up to date on recent technologies so that I can blag my way through the interview, I'd say the ADSL is going to be the last thing to go...
        • by Deagol ( 323173 ) on Monday February 03, 2003 @10:55AM (#5215320) Homepage
          I'm not talking about tech weenies like you and me. I'm talking about the slightly poorer folks who decided to indulge in that cool internet thing that's all the rage. When push comes to shove, I'd wager that when it's time to start trimming back (another kid on the way, dad's hours are cut back, or mom looses her job), people will cut the ISP before things like cell phones (1-year contract) and subscription TV (cable, satellite, etc).
          • Especially since a lot more people can get internet access at work. I suspect folks who canceled the home connection may be checking their Yahoo email during lunch. Also, their work connection is probably faster than the home dialup ever was.
      • the bottom line is people can get dial up internet service for $10/month

        And I think about that everytime I get my $45 cable modem bill. How bad would it be?
        • Every time I think that, I remember back to the time when it took forever to download an ISO, and when web pages _crawled_. I remember back to when downloading a single fansub off of the usenet wasn't feasable because the parts would expire before I got them downloaded. I even remember back when logging into my home machine with ssh to read my email was painful because of the annoyingly high latency of modems, and difficult because I'd get a new IP every 8 hours or so when my ISP kicked me off.

          Heck, I'm getting reamed in the rear every month by Comcast and I still keep going back to them (well, they are the only broadband provider in town...).
          • Every time I think that, I remember back to the time when it took forever to download an ISO

            For the $35/month I'd be saving, I could just buy copies from CheapBytes and still come out ahead.

            downloading a single fansub off of the usenet wasn't feasable because the parts would expire before I got them downloaded

            I'm not familiar with what that is, but I don't download binaries from usenet, anyway.

            It really comes down to the fact that I basically only check email and read a handful of websites anymore. I don't download the latest game demos or much else. Sometimes I download Gnome or KDE or something, but I could just let it run for a few days. Wouldn't bother me that much.

            I hope I don't get in trouble for saying this. I know Congress is very concerned about the slow adoption of broadband.
    • The $20-to-$30/month for a dialup subscription can feed a family for a few more days when things get tight.

      Wouldn't this sort of thought process justify an increase in subscribers flocking to AOL/MSN to take advantage of the low cost, downgrading from broadband? Millions of people now have broadband at $40 or more per month, and following your hypothetical penny pinching scenario it would seem appropriate that they would downgrade to the $9.95 or less light usage plans most of these services offer. Claiming that someone entirely cuts themselves off seems extremist as the net represents one of the primary communications mediums today: How does one find and then communicate with prospective jobs without an internet connection?

      I counter your claims and would say that the rocketing adoption of broadband does as well: Everyone is getting broadband, and dial-up providers are going the way of Slashdot's editorial skills.
    • Money is part of it. However, how many consider Internet a fad? And how many are willing to continue to pay for it?

      You and I, and perhaps other geeks out there might enjoy it all the time, but for the average person out there, how long before getting 2.8million hits on "Harry Potter" just doesn't make it worth the time or money?

  • by mirko ( 198274 )
    login: somebaudysentme
    passwd: somebaudysentme
  • by inteller ( 599544 ) on Monday February 03, 2003 @10:12AM (#5215047)
    ....the big 3 ISPs have seen the writing on the wall for a LONG time, yet they continued to expand their POTS infrastructure...ESPECIALLY earthlink. They better figure it out really freaking quick that when users find out that they can work just a little harder to find the same content through a non-branded ISP, they are going to drop their asses in droves. Looks like they already are. AOL has the potential infrastructure through Time Warner Cable...Earthlink has been able to finesse some cable sharing deals, but MSN going the DSL only branding route is going to lose if they don't sign some cable sharing deals.
    • I think EarthLink could keep most of its dial-up users if they upgraded their POP's to support V.92 connections, which allow for faster upload speeds, faster initial connect times and also safe temporary interruption of service when call-waiting is activated.

      Besides, isn't EarthLink heavily involved with broadband themselves? I think if EarthLink was smart they should ally themselves with AT&T Broadband, Time-Warner Cable and Cox Cable to become the primary ISP for cable-modem connections.
      • Except that all those companies are either owned by or run their own ISPs, therefore why give up their share to Earthlink? I mean, Earthlink says "Hey, AOL Time Warner, wanna rent us a ton of your bandwidth to use to compete directly against you?"

        For some reason, I doubt it.
      • "Besides, isn't EarthLink heavily involved with broadband themselves? I think if EarthLink was smart they should ally themselves with AT&T Broadband, Time-Warner Cable and Cox Cable to become the primary ISP for cable-modem connections."

        Earthlink owns part of Sprint or Sprint owns part of Earthlink, I forget which.

        In my neck of the woods Sprint bought up the local telco (Carolina Tel and Tel) several years ago. I can't get any flavor of DSL (they've been saying "real soon now" for years) despite living about 2000 feet from a reasonably new switching station.
        The only available broadband is through the local cable monopoly (AOL Time-Warner) who offer Roadrunner (which they own), AOL (which they own), or Earthlink (which has a financial stake in the local phone company monopoly which doesn't offer DSL).

        My former dial-up ISP (Volaris), which I wound up with as most of the local ISPs got merged and swallowed up, went belly-up and handed all of us over to Earthlink, who dropped all but one of our many legacy e-mail domains (currently being supported for free for about another 30 days by the saints at mpinet.com just because it's the right thing to do, bless them).
        So Earthlink has several thousand "new" dial-up customers, but we aren't an increase in the total number of people accessing the internet, we just got moved from one column to another.
        Although I'm not particularly thrilled with Earthlink the company, I've had only positive experiences with the people there with whom I've talked when I finally got through to an actual human. No doubt they're the ones most likely to be kicked to the curb in the downsizing.

        Would I rather have a broadband connection instead of dial-up? Not badly enough to get it from or through my local cable tv monopoly, especially at nearly twice the price.

    • For many people, the big value about AOL is not just the dialup access, it's the content - Instant Messaging with their friends, chat rooms, cheerful People-Magazine-style news, etc. MSN may have a little bit of this, and as far as I know Earthlink has none of it that isn't openly web-accessible. A while back AOL started offering a content-only account for about $10 for people who had their own ISP connections, which meant that if you had broadband or a real dialup provider, you could still get your AOL and keep your AOL email. Not sure if that's still the case or not.
  • by diablobynight ( 646304 ) on Monday February 03, 2003 @10:13AM (#5215050) Journal
    I don't get it, are they surprised? AOL costs 25$ a month. In my area you can get get DSL for 38$ so I don't think it should come as a surprise that people would go for a connection ten times as fast that didn't require the worst designed software on earth for an extra 13$. AOL has been robbing people for the past 5 years, they kept their prices jacked up because they could and had a corner on the market.But I doubt AOL is really noticing too much of a hurt, because I have noticed idiots who get broadband and still pay for AOL as well. People are dumb and that will keep AOL and MSN in business for a long time.
    • by liquidsin ( 398151 ) on Monday February 03, 2003 @10:34AM (#5215182) Homepage
      It's not so much that people are idiots, though that is often true. A few people I work with have gone to broadband in the last year or so, but didn't want to give up the email addresses they've been using for the last six or seven years. I couldn't justify $25 a month for ONE email address (I pay $15 a month for hosting that comes with unlimited addresses) but that's a personal choice, I guess...

    • by Apreche ( 239272 ) on Monday February 03, 2003 @10:42AM (#5215234) Homepage Journal
      You're right on every count, except that it wont keep aol in business. AOL's business model depends on the fact that they will always be getting more subscribers. Even in AOL managed to keep everyone from leaving they would begin to lose money. The fact that people are leaving means big trouble for AOL. Mainly because they have a giant useless dial up ISP infrastructure. That infrastructure costs money, and if nobody uses it that's all loss. Sure there are a lot of idiots who keep paying for AOL after they get broadband. But unless AOL has a constant increase in membership they will have diminishing returns and eventually go bankrupt. They're still huge, so it wont happen soon, and they've still got a chance to save themselves.
    • by Crispy Critters ( 226798 ) on Monday February 03, 2003 @03:34PM (#5216960)
      People have to go to broadband. Too much of the web is becoming unusable over a modem. This is probably mostly due to graphics. How many commercial sites do you see have a gif of the word "site map" or whatever rather than the ascii text? Almost all of them. Slow connections also sometimes result in the download hanging. No big deal? It is if you are trying to buy airline tickets 2 weeks in advance where the prices and availability change every few minutes and a disrupted session can cost you hundreds of dollars.

      Most people who have the option wait to do some of their surfing at work on a fast connection. For people who don't have that option, they must pay for a faster connection or accept that some web content and services will be barely usable or unavailable.

  • by Marqui ( 512962 ) on Monday February 03, 2003 @10:13AM (#5215051)
    Although I was with a local ISP, the cost of the 2nd phone line was $25.00 and my ISP was $15.00. Broadband through the cable company was $40.00 so it was a complete wash for a huge increase over 56k, why would I want to stay on dialup? They can thank all the baby bells for not wanting to go the "last mile" to give people a choice of providers.
    • by Gortbusters.org ( 637314 ) on Monday February 03, 2003 @10:19AM (#5215089) Homepage Journal
      I made the same choice years ago. And if you have other people in the house that want to use the internet, you can forget sharing a dial-up connection. Ah, memories of fighting for computer use. Casual users might be able to share a dial up to check e-mail and such, but as soon as you have a DAOC player, a pr0n fanatic, or slashdot reader you need full access 24/7.
    • Because not everybody needs instant access 24 hours a day. I've gone through the steps... five years ago I had earthlink, four years ago I got the second phone line, three years ago I went cable...

      I've been debating going back to dialup to save money - I wouldn't get the second phone line. I honestly am just not online enough - and I'm a computer nerd. I suspect others realize this, too...

      I'm not arguing that people aren't switching to broadband, but I'd say a significant loss at AOL, Earthlink, and MSN is that people are discovering local $10/month dial up internet access.
  • by jj_johny ( 626460 ) on Monday February 03, 2003 @10:15AM (#5215055)
    I think that AOL, MSN and every other ISP would have a lot higher churn if it was easy to get stuff forwarded. Since your email address is really the only way that people can get hold of you, it makes the switch difficult. And since every company wants to spend as little as possible on support, there are lots of unhappy people out there who just don't want to go through the hassle.

    As a former AOL employee, I still have an AOL account even though I find the service has ticked me off more than a few times but my wife can't really change her email address at this tmie. So we are like so many who just are waiting for the right time.

    You can't stop the future, you can only simulate it by stopping progress

    • Thats why I bought a domain. My email address is permanent regardless of my provider. Changing emails is a real pain. ISPs rely on that - so they give great introductory offers, but raise the rates once they have you sucked in. With my own domain, I can changes ISPs painlessly.
    • I started using pobox.com [pobox.com] about five years ago, just to deal with this problem. For a fairly low price, you get an email address with them, and they forward it to whatever ISP you're using. This lets you keep the same address forever, though now that spammers have taken over the world it may be time to get a domain name instead. Pobox.com was started by a couple of students in their dorm rooms, and rapidly expanded to a real business.

      Fastmail.fm has a nice tagged email feature using subdomains - not only can you get mail at username+tag@fastmail.fm, but tag@username.fastmail.fm translates to the same thing, so you can give everybody an email address like that and trash any addresses used by spammers. Like many of the newer web mail systems, they also let you retrieve mail from them with IMAP, and can fetch mail from other systems with POP or IMAP.

      I haven't actually gotten rid of the Netcom->Mindspring->Earthlink dialup account I used back when I got the pobox.com account, though with broadband and work-provided dialup for my laptop it's about time to.

    • I think that AOL, MSN and every other ISP would have a lot higher churn if it was easy to get stuff forwarded.

      I will happily forward to you all of my AOL mail and my wife's hotmail. I have given up on them both, what you will get is spam spam spam and more spam.

    • You can get an address at spamcop.net, read it from anywhere, AND get spam filtering, for about $20/year.
  • by Gortbusters.org ( 637314 ) on Monday February 03, 2003 @10:16AM (#5215062) Homepage Journal
    sign up for AOL. He can't afford broadband (yet). He just started using the internet. As soon as he finds the pr0n movies for download, I'm sure he'll drop his smoking habbit so he can get broadband and pick up a new (better?) habbit.

    With streaming content becoming more available and higher quality, the days of dial-up are numbered. I'm suprised apartment buildings don't pool together and get a T1 into the buildling and provide internet to all apartments.
  • Everytime a NYT story is posted on /., new registrations there go through the roof!
  • No surprise here (Score:4, Informative)

    by MonTemplar ( 174120 ) <slashdot@alanralph.fastmail.uk> on Monday February 03, 2003 @10:19AM (#5215090) Journal
    In the UK, most people who have broadband service receive it either through as ISP, who in turn use either BT (DSL) or one of the two cable operators, NTL and Telewest (Cable Modem/STB). A lot, like me, probable go direct through the service provider (in my case, NTL).

    AOL UK has recently started offering broadband services, through BT, but I've yet to see any figures on how much success they've had with it. MSN UK haven't made any moves on that front yet.
    • I was going to post this exact same thing.

      The only people I know that are still on 56k dial-up are the casual weekend users. The ones who check their emails on a Saturday morning and visit a handful of websites - like my Dad for example.

      NTL also do a 128/128 cable connection that is as cheap (or the same price) as their 56k dial-up. Many people, like the father-in-law, have swapped over to this setup.

      Competition is hotting up at the moment. ASDL for £20 a month is £5 less than I'm paying. The 1Mbit line price came down by ~£15 around xmas time. When it drops again I'm upgrading.

  • In the UK, anyway, so this isn't a simple phenomenon.

    However, received wisdom suggests that going through AOL increases latency so much that gamers wouldn't want AOL even if it was BB. There's more to life than raw bandwidth.

  • by Spencerian ( 465343 ) on Monday February 03, 2003 @10:21AM (#5215103) Homepage Journal
    I was one of EarthLink's earlier subscribers, and appreciated its services, which were quite reliable.

    My business needs required something faster than dial-up, so when EarthLink offered DSL, I applied. At the time, however, DSL wasn't available for my part of the city (a medium-large midwestern one--think race cars), so Time Warner Cable's RoadRunner service was my only option.

    Today, as a result of court agreements and such, EarthLink and AOL can provide their services through cable and DSL options, but the carriers (the cable and phone companies that own these lines) don't advertise the options much, from what I see.

    I use Comcast High-Speed service today, which works OK, but they have tech support that's about as bright as a bag of coal.

    I agree that the Internet was a fascination for some, and now a relatively expensive one to those who don't use it much. So, many of the users who've signed off are probably the "sightseers."

    High-speed access is still a bit too expensive for most, despite the faster speeds. Paying twice to 2.5 times as much isn't a strong marketing point.
    • The problem with Comcast's tech support is that the majority of their call centers are in Canada (disclaimer: I'm Canadian and have a few friends who work at these call centers). You see, the majority of their calls are from people who say things like " Hey, uh, my internet's broken.". After ten minutes or so of "can you load any webpages in explorer", disconnect the cable modem and reconnect it" and so on, they finally ask the sub to power cycle the computer and find out that he can't because there's been a power failure and he's had no current for the last two hours. I believe this to be one of the main reasons why their tech support sucks so much: they've all stopped caring.

  • by Mean_Nishka ( 543399 ) on Monday February 03, 2003 @10:25AM (#5215129) Homepage Journal
    The closed nature of their networks mean that independent ISP's (even the monster Earthlink) will no longer be able to compete with phone companies. Here in CT, the nearest competitor to SBC DSL has to charge at least $20 more than the service from the phone company. They rent the DSL services from the telco, making it impossible for them to compete. The days of infinite ISP choices are sadly over.
    • Thing is, though, I'm not entirely convinced that this will happen, largely because of what is (not) considered permissable use of the connection by many ISP's.

      Most ISP's I see give you a dynamic IP address and schlep everything over PPPoE, which means whe you power down you're probably going to get a different IP address; makes running servers a little difficult, unless you service warez and hang out on IRC to spamvertise your box, and even then a lot of what I've seen has it that ISPs will specifically deny you in their TOS the ability to run any sort of server, which is thinly disguised as a lack of faith in the users' ability to secure their own machines. (They offer business packages for upwards of $120, but the average home geek may not be able to justify the expense just to run their own home box as a webserver/ftp server/bbs/whatever.)

      OK, maybe that "lack of faith" thing is a little off. After all, if you get your AOLer onto the telco, what are they gonna know about securing their box? Many of them don't even run antivirus software.

      So you get people like Speakeasy in there. Static IP, not much speed out, but hey, it's $60 bare minimum, and seems to cater to the geek. In my case, when I first signed on, I was told that I could pretty much run any kind of server that didn't screw with their bandwidth.

      Now that I've just finished sounding like a corporate shill, I suppose that if there were more companies out there that offered services similar to speakeasy (who seem to be successful despite all things) despite the higher cost, aside from the side effect of Speakeasy having to compete with more of a niche market, this just might put a cramp in the style of the telcos.

  • More savvy? (Score:3, Insightful)

    by operand ( 15312 ) on Monday February 03, 2003 @10:25AM (#5215133)
    I think the broadband push is one determining factor in changing from the powerhouse ISP's, but I also think users are *growing up* from AOL/MSN to using only their preferred browser. I consider AOL/MSN users to be novice and prefer to use these ISP's because of ease and simplicity. Now these users are gaining knowledge of the "internet" and have the ability to *surf* themselves without AOL/MSN pushing content to them directly.
  • Broadband... (Score:4, Insightful)

    by blindcoder ( 606653 ) <slashdot@wegwerf.anderdonau.de> on Monday February 03, 2003 @10:25AM (#5215136) Homepage
    isn't what is used to be.
    Here in Germany you can get a 128kBit up / 768 kBit down async line. The best a normal household can aford is 192 kBit up / 1536 kBit down async.
    The problem is that as bandwidth goes up, quality of the net goes down.
    I heard people saying: "Why should I not place these 2MB images on my website? It's downloaded with my DSL line in seconds."
    And don't even try to tell these people what a thumbnail is.

    It's just one example but you can find more of these. People sending 15 MB .swf files via E-Mail to 20 different friends and the like.

    SQL Slammer won't have had the effect of broadband coming to every home.
    • Most e-mail systems on this side of the pond (North America) have a message limit size of 3-5 MB so it does help limit this type of behaviour.

      Still never under estimate the stupidity of people in large groups.

    • by JKConsult ( 598845 )
      While I'm certainly agreeable and sympathetic to the sentiments of the parent, the problem is, this is exactly how things work. Perhaps things are different in the homeland (Finally, I get to connect with my roots.), but here in America, this is exactly what the movie industry did, and they did it on purpose.

      Picture a production executive: "Why should I not agree to do this terrible movie? People will see it anyway." A theater owner: "Why should I not perpetrate the single largest price gouge that the average American sees over some kernels of 'popped corn' and sugar water? People will pay." A person in charge of showing the movie: "Let's put this movie in 8 screens, so everybody sees it all at once, and everybody forgets about it in 3 weeks. Then, let's do it again!"

      The problem is that the problem feeds itself. So does this one. You know what the solution is? 'tis like a marketer's dream... More solutions! Bigger broadband, better broadband, different broadband!® And some will buy it, and some won't, and some will still be on dialup, but it will be different, and that's good, right?

      You're right. But once you let the average person into something, they usually ruin it.

  • Broadband Rates (Score:4, Interesting)

    by jglazko ( 56166 ) on Monday February 03, 2003 @10:27AM (#5215156)
    Ok, so with the number of cable broadband subscribers going up, it makes sense that the cable companies can finally (hopefully) start collecting on those economies of scale. So when will we start to see the price stabilize? Or are we stuck with endless rate increases a la cable television?

    I've already given up on DSL from the phone company (Good luck getting competitition-inducing rates from those guys.)

    IMHO community run broadband (see this link [slashdot.org]) and other means like this are the only hope we have of keeping prices reasonable.

    Erp, did I just come out in favor of regulating Internet pricing?!?

  • Sharing broadband (Score:5, Insightful)

    by roalt ( 534265 ) <slashdot...org@@@roalt...com> on Monday February 03, 2003 @10:28AM (#5215162) Homepage Journal
    Another advantage of broadband internet is that it is easy to share it with room-mates or neighbours. (even though it's not always allowed). It's a lot cheaper buying together one large broadband (ADSL or cable) internet connection than all using dial-up.

    With the coming of wireless internet, it even becomes simpler to share the net (you don't even have to dig or drill a line in the ground or wall for your ethernet cable). I think this also has some impact on the decline of dial-up subscriptions.

    • I honestly don't think that sharing broadband is the primary motivation for most people. Sharing a single computer for Internet access is acceptable until you get used to every computer in the house being networked. And I've seen some SOHO routers that had a serial port for connecting to an external modem.

      I think broadband's big advantages for the non-technical user is convenience and (relative) value. Having an always-on connection is much nicer than waiting for a modem to dial (and possibly redial)... and the phone line isn't "in use" with broadband. Also, paying $40-$100 a month for broadband is easy to justify based on speed; while it may not be 30 times faster, you can do more with broadband simultaneously than you can with dialup.

      Being able to toss a router between my LAN and cable modem is a major benefit to having broadband, but I doubt that the average would be capable of doing it without help.
  • The question I see is, if the RIAA's intimidation/anti-consumer tactics (or DRM-etc) gain significant ground, and downloading mp3s, movies, etc becomes too difficult, will home users really need a 300kbps connection? (I'd never go back to a 56k modem that never connected faster than 22k, but that's just me).

    Actually, now that I wrote that, I think they do--who knows what else will take the place of them though. A real-time slashdot feed perhaps?
  • by tarnin ( 639523 ) on Monday February 03, 2003 @10:33AM (#5215179)
    I work for a small, privatly owned ISP. I do see alot of our older dial up customers going over the broadband, but more and more, they are cancelling because of lack of money. Even at around $20 a month or so many people see internet access as something extra not something they need.

    Maybe this tred will turn around but I doubt it. Even if these customers do get back on firm ground, I see them going with broadband via cable, phone company, or even the electric company long before comming back to a dial up.
  • At $23.50/month, AOL has less customers than at $20.00/month.

    Price goes up, quantity goes down-- that's a demand curve.

    nb: There's other reasons for the decline too, AOL and MSN blow as ISPS and don't support linux and censor tons of content in the newsgroups, and break your Network Connections and ...
  • Earthlink broadband (Score:3, Interesting)

    by Enry ( 630 ) <enryNO@SPAMwayga.net> on Monday February 03, 2003 @10:38AM (#5215215) Journal
    A few weeks ago I got a mailing from Earthlink saying I could save $5 by switching my cable internet service from MediAT&Comcast to Earthlink. Aside from the $5 difference, I could not find a reason to switch, and the $5 is tiny compared to what I'm paying for the service in the first place.

    If Earthlink had a different TOS (I could have servers, for example), then I might consider switching. If the only change is I have to install Earthlink software instead of ATTBI software, then it's rather pointless, isn't it?
  • by Jugalator ( 259273 ) on Monday February 03, 2003 @10:40AM (#5215224) Journal
    From: Bill Bill (billbill@wetware.com)
    Subject: msn.com spam humor
    Newsgroups: news.admin.net-abuse.misc
    Date: 1996/11/05

    I sent email to abuse@msn.com about a spam.
    This is what came back:

    > From MAILER-DAEMON Tue Nov 5 12:03:42 1996
    > Return-Path: <MAILER-DAEMON>
    > Date: Tue, 5 Nov 96 19:47:00 UT
    > From: "System Administrator" <SysAdmin@msn.com>
    > To: "billbill@wetware.com" <billbill@wetware.com>
    > Subject: Undeliverable:[SPAM] Re: liberated finance
    > Your message did not reach some or all of the intended recipients.
    > Subject [SPAM] Re: liberated finance
    > Sent Tue, 5 Nov 96 19:47:00 UT
    > The following recipient(s) could not be reached:
    > abuse@msn.com On Tue, 5 Nov 96 20:01:52 UT
    > The Microsoft Network member inbox is full.

  • by Anonymous Coward on Monday February 03, 2003 @10:52AM (#5215297)
    Since I work alot with the public and their computers let me tell you what I think the biggest reason for the decline is.

    90% of the houses I go to are for people who are upgrading and now want two computers. (Their old one + their new one) AOL requires a $20 subscription fee + more money for multiple screens and though you can have broadband and still use AOL they still charge an aol usage fee.... *yawn*

    So they upgrade to broadband because that 56k stuff has to go and because it can easily service two computers, they buy a router, they leave AOL but download the messenger to stay in touch with their buddies. They migrate to using Outlook Express (cringe) But they also have norton so I guess thats ok... sort of.

    Then they also cancel AOL + Second Phone Line and broadband is about the same price. Some even cancel their phone and do VoIP. (Its rare but there are some really good offers out there that even offer wireless phonejacks that you can sticky to your wall or plug into an outlet...)

  • by Anonymous Coward
    While dial-up is a relatively cheap product to deploy and support, the broadband products are expensive and more complicated. The additional cost means that ISPs can't afford to move into all of the same areas that they could with narrowband. So in some areas, especially more rural parts of the country, customers are having to leave the three major ISPs to go with their local telcos to get a faster connection. Most ISPs don't own their own DSL equipment anyway. They go through the local telcos themselves or through companies like Covad. To do this ISPs have to establish contracts with these companies to resell their services. This cuts into their revenue as the ILEC's get a piece of the pie as well.

    Another problem is that broadband is not as profitable as dial-up currently. Whereas dial-ups bring in $8-$10 a month on average, broadband products bring in the neighborhood of $5/month. Sometimes the the ISPs don't see any profit for more than a year (if ever) as they offer deals for free modems and discounted service fees.

    As an employee and one of the 3 largest ISPs I can tell you that IMO the cost of broadband isn't going to be going up anytime soon as long as the CLEC's continue to convince the government that competition is a good thing. But you can expect to have your ISP try to sell you on additional services like static IP, VoIP, priority tech support, Long Distance telephone service, and offer discounts for longer contract terms.

  • Not suprised... (Score:2, Insightful)

    by Bendebecker ( 633126 )
    I think it is not just people using broadband. I think it also has to deal with the fact that people no longer need crutches online. AOL and MSN are really geared towards people who don't know too much about the Internet. When you get used to doing stuff on your own, those extras MSN and AOL provide become more of a nuiscance than anything else. At that point people usually go for a more basic ISP that gives you access to the Internet at a cheaper price with more reliable (as in easier to connect) service. There is a reason why people make fun of AOL users after all...
  • Duh (Score:3, Insightful)

    by frozencesium ( 591780 ) on Monday February 03, 2003 @11:10AM (#5215408) Journal
    hhhmmm...let's...AOL and MSN both have propritary winblowz spyw^H^H^H^H clients. they loose many of their customers after the trial period as many don't want to pay for their advertisements, poor customer service, etc.

    now let's look at my local cable provider. their network has been fairly reliable thus far. no software to install (though they do try and convince you to run their install program that puts their logo in the corner of IE and sets up your mail settings). my only REAL complaints with my cable service is that they block port 80, (because they don't want me to run a "server"...i guess they think a web server is the only type???) and i can only transmit at 128k while downstream is supposed to max out at 1.5M.

    of course, i can live with those small irritations when i'm downloading the latest kernel source, mozilla, p0rn, and openoffice in a matter of min. instead of hours.

  • dsl vs cable! (Score:2, Interesting)

    I don't know how well cable (comcast) is going to develop - for two months they failed to show up to even install the line - so I went with Verizon DSL and the service has been fast enough for my tastes (used to a university ethernet!)...anyway I just finished doing some private home wireless networking jobs for small business people buying dsl for their homes and wiring all their XP machines together. I get the feeling the at very least DSL (cheaper and NOT the cable company) is about to score BIG with the cheap wireless products you can pick up anywhere nowadays.

    • Re:dsl vs cable! (Score:4, Insightful)

      by Junta ( 36770 ) on Monday February 03, 2003 @11:54AM (#5215629)
      You can't say boradband via cable companies has a doomed future based on your singular personal experience, it just seemed ludicrous.

      Ultimately, I think both technologies have about equal potential, with one beating the other depending on where you are.

      DSL is offered by companies that typically have more experience in offering high-bandiwdth internet connections, so service and reliability I think is indeed, mostly better with DSL on average. However, as Cable companies have learned their lessons, it becomes harder and harder to distinguish the two. DSL still seems to typically offer better latency (around my area, at least), but cable services offer better throughput.

      To home consumers, the fine details don't make much of a difference. Availability makes all the difference. I can't get DSL at any decent rate. None of my family can get it at all. I do, and my family could, all have cable modem at 2 megabit downstream, 768k up. In addition to that, a sort of unintended benefit of cable modem service is that there is a good chance the installer won't bother with a video filter and you get free cable with the net connection. I know, not a fair comparison because cable companies hate this, but realistically speaking, it must be considered.
      • Cable companies send their techs driving around in vans with sniffer gear. Don't put on your tin foil hat just yet. It isn't as obnoxious as it sounds. Each cable connection in your house leaks a predictable amount of RF. Your cable modem would be one such connection. As you connect more things to your cable, that slight leakage increases. What the tech in the van sees is little more than a RF signal strength indication. What they do would work just fine with nothing more than an analog gauge and a little experience.

        They don't just look for people outright stealing cable either. They're also interested in people using more hookups than what they paid for. More hookups - more deflection of that RF gauge.

        Since all they are doing is monitoring the amount of signal leaking out their own network, they are legally in the clear on this. The fact that they didn't bother with a trap doesn't mean you're entitled to the video portion of the signal. If you hook up a TV, they'll find it if they're inclined to look for it.

        Oh, they often use Time Domain Reflectometers to find faults in their cable. Those you who ride the network cabling range know about these too. A TDR will give highly precise readings on just what is sitting on a line. Those will work even if some smartass turns his house into a faraday cage.
        • Well, at least around here (bunch of Townhouses), things are too much of a mess for anything like that to be remotely possible. The junction box for all the homes is randomly hooked up, with no record of what wire goes where, and they even use standard splitters in that box to further confuse things. As far as reading from the homes, the homes are all together, so without trespassing into your house, they can't be sure. With townhomes, apartments, and densely constructed neighborhoods, 'sniffing' isn't so feasible.

          Also there is the assumption that the technicians care to go to the trouble. Around here, technicians say flat out (while bosses are not looking, of course), to check cable hookups before calling for cable installation if all you want is TV. 8 times out of 10 the technician never bothers to disconnect. And if they don't even bother checking that, they can't be expected to detect minute differences in RF between 1 or 2 connections.

          All this said, I am aware this is theft of service. And I actually don't do it (my only TV is so far away from the working cable outlet, it was only worth my time to see if it worked). And I know the omission of the filter doesn't give me rights, but as I said, free cable tv is a highly unofficial benefit, provider hates it, but consumers like it and learn of it by word of mouth.
  • As some previous posts have mentioned, the Internet has passed its faddish prime. Users are finding they either need more (ie broadband or DSL), or can do without it (ie Ebay is NOT life). In a bad economy, that extra cash can go towards useful items. Also, the pool of potential users has dwindled greatly. It is the saem staory as that which happened to the PC manufacturers, they plateaued due to a variety of factors and now need to find an alternative revenue stream. AOL should start pushing TimeWarner's cable instead. I see no reversal of this trend and foresee the death of dialup in the end...
  • ISP = commodity (Score:2, Interesting)

    by Anonymous Coward
    I think my subject line says it all. An ISP is nothing more than a connectivity provider. The big ISPs tried to become content providers/portals. They failed. The diversity of internet users is too wide for anyone to attract a big enough audience. How many of you actually visit portals (msn.com, excite.com, yahoo.com) anymore? I myself find their content an insult to my intelligence.

    This is exactly where broadband comes in. With ISPs being reduced to a commodity service, people are getting the most bang for their buck. And new internet users are savvy enough that they don't need AOL's (and the likes) handholding.

    As far as email addresses go, I only use Yahoo! mail, never ISP provided POP accounts. That won't go away anytime, and it won't change everytime I move from the US to Europe and back ...

  • by n3rd ( 111397 ) on Monday February 03, 2003 @12:04PM (#5215673)
    There are three main reasons people are leaving the premium services such as AOL and MSN.

    The first reason people are leaving AOL and MSN is because the features they offer over traditional Internet access (ie: web browser) aren't worth it. Why use AOL's news area when you have CNN.com [cnn.com] and other sites? Why join one of their communities when you can join one of the hundereds of message boards and mailing lists on the Internet? You can still use instant messaging services (AIM [aim.com]) and get free e-mail (Hotmail [hotmail.com], etc) without using AOL or MSN.

    Another reason is usability. Surfing the net, using web based e-mail and instant messaging has become very, very user friendly over the past 5 years. Most people who have used AOL for a year or two can now use the web exclusively without too much of a learning curve.

    The last reason is combined with the first, and that is speed and cost. Everyone (my mom included) loves high speed access. She understands it's about twice as much as AOL per month, but since she knows how to get around on the Internet without AOL she doesn't need AOL any more. Why pay extra for services she doesn't use (or can get for free on the web) and a GUI that's almost too easy?

    In summary, free web based services that are comperable to AOL/MSN's, computer literacy and premium content that isn't worth the additional cost is what I feel will be the downfall of providers such as MSN and AOL. Hopefuly they recognize this and provide cheap good old fashioned dialup or broadband to keep the customers that would otherwise leave.
  • Many people, my mother included, now want "the real internet" instead if AOL/MSN services. She became aware of it by having DSL at the community college that she works at. Well, that and her 2 kids always nagging her about dial-up ;-)
  • Content is King (Score:2, Interesting)

    by PierceLabs ( 549351 )
    The one thing that AOL and MSN realize (now) is that content is king. They have to provide exclusive content not available anywhere else if they want to keep eyeballs. This is the same scenario of the .com days. AOL/TW is clearly in a position to increase stickiness to AOL if they can just get all their little fiefdoms to realize that its in their best interest to give exclusives to AOL. Right now the fiefdoms are only looking out for their own business units and giving AOL hand-me-downs.

    As much of the 'good' internet goes behind a subscription wall and the sources for 'free bootleg content' starts tto dry up. The large ISPs (especially AOL/TW) are in a position to capitalize on this position and both retain and increase membership. This model is no different from that of a TV station. You get the best content on board and people watch your station. THEN you can start talking about advertising revenue. The old AOL folks just had this underpands gnome view of economics that suggested that people would advertise on AOL for reasons that they couldn't themselves specify.

    If AOL wants to prove its worth, just having bandwidth is NOT the key. People get super fast bandwidth not because its cool - they get it because they want to GET stuff. And until AOL starts providing stuff thats unique and compelling - they and all subscription model ISPs and ASPs will be on a downward toilet spiral.
  • What this shows (Score:3, Insightful)

    by ZoneGray ( 168419 ) on Monday February 03, 2003 @12:27PM (#5215779) Homepage
    What this shows is simply that the AOL model of bundling connectivity with content is failing.

    We all knew it would... it makes some sense to use content to sell connectivity. But that means you have to either break even or lose money on the content, otherwise your connectivity will be overpriced.

    Another approach is the revers... using connectivity to sell content. Again, same situation... you couldn't make money on connectivity.

    AOL's early success convinced a lot of people that there was some natural synergy between the two. There's isn't. AOL's business model (and the Time merger) are based on the theory that by combining the two, they could make more money on content AND more money on connectivity. Can't work.

    Even more amazing is the number of companies that saw the growth of AOL and concluded that bundling the way to go. Excite@home was one of the most spectacular failures that was fueled by this erroneous analysis.
  • by Bob(TM) ( 104510 )
    I thought one of the principal arguments used to support the DMCA was to speed the acceptance of broadband. As I recall, the rationale was that the additional protection for digital media distributions would spur the offering of digital content. In turn, this would increase the incentives for consumer adoption of broadband.

    With very little in the way of conventional entertainment available (the RIAA has killed most and movies don't exist), an increase in broadband acceptance appears independent of the incentive. All that really happened was the consumer got shafted.
  • by asv108 ( 141455 ) <asv@ivoss. c o m> on Monday February 03, 2003 @12:48PM (#5215891) Homepage Journal
    You can get broadband for the same price as dialup access when you consider the cost of an extra phone line. I've switched many relatives to broadband, after taking a look at their monthly phone bills. Almost all of them have separate phone lines for Internet access.

    For example my mother was paying $20/month for a second phone line and $20/month for her ISP. We got rid of her second phone line and the ISP for a cable modem that costs the same, $40/month.

    Another phenomenon that phone companies and ISP's have to worrying about is people not having a landline at all. Most people I'm friends with (age 22-28) do not have a landline, but instead use a cell phone exclusively. There are lots of benefits of using a cell phone only. For people with roommates, you don't have to worry about splitting up the phone bill or dealing with calling cards. On a cost basis, I would rather pay $75 for a really good cell plan than a landline with no long distance for $40 and a cheap cell plan for $35.

    Most of the people who I know who use a cell phone exclusively are also cable modem subscribers. Those who are not, just use work for personal Internet access. Of the people I do know with landlines, most of them have to have them in order to dial-in to their company's network because of the absence of a Internet VPN.

    I've been landline free for three years now, with no regrets.

  • In the other news: all ISPs complain that no customers want to subscribe to Internet access accounts with speed limit 2400 bps. In fact, all their customers are very old people who doesn't use Internet mostly.

    Our anonimous source from one ISP company told us that his company now doesn't know what to do with many of those old modems. Perhaps they are going to lay off all modem support operators. We've asked why not switch to higher speed and the answer was: "we cannot do it, we don't know if it will be too fast for us and we afraid of anything new anyway".

  • by Archfeld ( 6757 ) <treboreel@live.com> on Monday February 03, 2003 @12:56PM (#5215938) Journal
    or anyone else is a BAD THING. As your local cable/dsl provider gets a strangle hold on the market you can be sure the prices will GO UP not down. We are seeing it with cable TV already, in area's that ATT is a monopoly are already seeing a rise in cost while they CUT services...De-regulation is everybodies friend...NOT. SBC is already larger than it was before the government called it a monopoly and broke the bells apart...Thanks Bush
  • Yeah, if you subscribe to AOL, Earthlink, or MSN you can get DSL or cable for only a little more, and you might even be saving money if you have a second line for internet use.

    That's not why any of the people I know are leaving those ISPs, though. In my experience it's a combination of high prices, questionable billing practices, and poor customer support. Earthlink seems to be especially bad. I knew a lot of people that signed up with jps when it was $99 per year. jps got bought by MediaOne(?IIRC) and the rates went up to something like $12 a month. There was a little grumbling, but nobody did anything about it. Phone support was much less useful, and all the useful online support information became much more difficult to find. Then they got bought up by Earthlink, rates shot up to the $20 range, and everybody started getting bills for months they had already paid for, and getting cut off for not paying. Phone support got downright hostile, and useful online information completely disappeared.

    A lot of people paid what they had to and jumped ship as soon as they found a $10 per month ISP. A few lucky ones like my dad, who saves paperwork like it's a freakin religion, where able to browbeat Earthlink with threats of lawsuit (Earthlink graciously gave him "for free" 6 months of service he had already paid for).

    Gee, I can't imagine why anyone would choose to go with a different ISP...

  • by jmichaelg ( 148257 ) on Monday February 03, 2003 @02:06PM (#5216320) Journal
    Fantastic, but unfortunately, true.

    I run a small business and use email to notify my clients. I send out 50, or so, emails once a week.

    Unfortunately, 1/2 my customers use AOL and AOL has a really nasty habit of silently dumping some, but not all, email from other ISP's. So, a couple of days after I had sent out the weekly notice, I would get calls from some of my clients saying they hadn't gotten their weekly status report. Dicking around with Sbcglobal over several months wasn't getting me anywhere so I finally bit the bullet and bought an AOL account just so I could reliably reach my clients.

    I'm not happy about it but I don't have the time to sort out AOL-Sbcglobal email incompatibilities. What really is annoying is that it was only my AOL clients that had problems getting their email reliably.

    If I was smart, (that's a big if ), I'd stop using email and have my customers go to my website to get their weekly status reports. Then when they complain about how slow AOL's browser is I can steer them to a non-AOL solution and earn a referral fee. The fee isn't worth much but getting more people off of AOL certainly is attractive after all the grief I've had from AOL.

  • Geesh, I use to work for an ISP out west and had to deal with a baby bell.. People complain about the price of dsl being 2x more than dial up, so what, with up to 50x faster speeds that's a good deal if you ask me personally. You really have no idea how much money needs to be put into it every month just to turn a profit from the ISP's standpoint, especially when they are a reseller of DSL through a CLEC/ILEC. First off reselling DSL makes you target numero uno on the phone companies list, you're digging into their profit. If they charge $39 for a circuit and $1 for their internet that's $40.. Well the ISP has to pay for that $39 too or the customer does going through the ISP depending on how billing is structured. An ISP can not afford taking a hit by charging $1 to a customer for access, it's just not feasible. The phone company can charge so little for dsl because even in not making a profit on it they have you locked in as a subscriber plus make it up in high phone service charges. In the DSL world 200 subscibers on a T1 is just not feasible as it will saturate it, but a T3 or DS3 will do the trick, that's alot of money a month for that pipe, at a $1 a customer = $200/mo in charges. Show me where you can even find a T1 for $200/mo off of a reputible company. This is why there are fly by night ISP's they simply CAN NOT compete with that pricing so they have to charge more. Also there is alot more involved with the biggers companies screwing reseller isp's that the normal consumer has no clue about and these things do happen as I have been witness and victim to them first hand. Just a thought for everyone
  • EarthLink has actually increased its subscriber base [earthlink.net] since last quarter and since a year ago to 5 million subscribers, with exceptional growth in broadband subscriptions. EarthLink also has the largest broadband subscriber footprint of any single ISP in the United States. I would hardly compare AOL and MSN's woes to EarthLink's.

    EarthLink does have issues with turning some profits but losses are very low, and they added 52 million dollars in cash to the bank, bringing their cash position to over a half a billion dollars.

    Additionally, EarthLink is aggressively pursuing in 2003 the "value" $10 dial-up business by offering services thru its recently acquired PeoplePC [peoplepc.com] subsidiary, which is guna put a lot of lethal pressue on United Online which offers spam-ridden, windows-only service thru custom dial-up/networking software which basically takes over your tcp/ip stack.

    EarthLink is by far the most diversified [earthlink.net] ISP in the United States. AOL and MSN are doomed dinosaurs stuck in the dial-up age, scrambling for their lives trying to land broadband deals with telcos a whole TWO YEARS behind their fiercest competitors.

    • Earthlink sucks.

      They bought up a lot of small to medium sized shops, that's how they increased subscriber base, nit because people were actually choosing them.

      I stuck with them for 3 months after they bought out penn.com. After deleted emails and charges for being dialled in twice ( when I have one PC with a modem and one phone line) I left them. That was 2 years ago and I still get junk mail from them to re-join.

  • Granted that I'm not much of an economist, but perhaps part of the problem is that dialup service is really a money sink? I'm figuring this because last year sometime, Speakeasy had implemented their broadband bank dialup, where every dollar you pay into a dialup account becomes credit (up to $225, they're no fools) for a broadband connection.
  • In my apartment, my roommates and I all share a single DSL line split by a Ethernet router. I know many others that do the same thing. Being able to easily divide a DSL internet connection is another big advantage over dialup. If hadn't convinced my roommates to switch DSL, AOL or MSN could have 3 more customers.

    Multiply this by 250,000 households and you could have another cause of the decline of there subscriber dialup base.
  • I use a regional [isdn.net] provider for my DSL.

    They're not perfect by far, but they're small, I know some of the guys there, and they're actually profitable. I know there are fewer and fewer regional providers these days, which is all the more reason for me to keep using one.

    I pay a little bit more for my DSL than I was paying for DirectTV DSL but I get very similar service and terms.

    I have few complaints but even if there were major issues I would likely still use a small regional for no other reason than I refuse to support any of the evil three (AOL, MSN, Earthlink).

    Also, the local cable provider (http://www.charter.net) really blows in my area. I hear about horrible lag, serious downtime, and other problems from everyone I know who uses them.

    My choice to use a regional may seem silly, but I feel like my money is being well spent supporting a dying breed. There should be more companies like them.

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