Staying afloat when ISPs don't

• What ISPs are doing to stay afloat

By John Yaukey
Gannett News Service

Jim Lamont had suddenly lost his connection to work.

Do your homework when picking broadband connection and avoid losing valuable time online. Gannett News Service

"A contingency plan would have been nice," said Lamont, who lives in Deerfield, Ill.

That was no doubt a common sentiment among the legions of subscribers who depended on NorthPoint Communications and its network of service providers, including Flashcom, Zyan and Jato Communications— all heaped into the digital dustbin in the spring and summer after a demise in many ways like Excite@Home's.

Welcome to the post-Internet-bubble world, where the shifting tides of boom and bust have left the landscape strewn with dead and ailing ISPs — many of them speedy broadband services like Excite@Home.

It's just another chapter in the seemingly endless saga of Internet flameouts, unless of course, you're among the disconnected. Lamont depended on his Excite@Home service to e-mail editors and research his stories — to pay bills, essentially. Small businesses especially have come to rely on ISPs. But you'd be mistaken if you think of Internet service like a utility, because it's nowhere near as regulated as electricity or phone service. Neither the Federal Communications Commission nor the various state public utilities commissions have any direct authority over ISPs. This is especially true with broadband service.

"Broadband is considered a luxury," said analyst Lydia Leong, who tracks ISPs for the Gartner analysis firm. "And consumers aren't entitled to luxury items, so they don't have a lot of leverage."

In other words, the moral here is buyer beware.

Red flags

Most ISPs don't perish without at least a few death rattles first. The trick is knowing what to look for.

If your ISP is publicly traded, simply check the stock price periodically for precipitous drops (go to thestreet.com and type in the ticker code).

ISP Rhythms NetConnection's stock price, for example, dropped from about $36 to 38 cents during the summer after another red flag: a Chapter 11 filing. In this volatile telecommunications environment, recovery from bankruptcy is a daunting challenge. Don't wait around for the asset liquidation; start shopping for an alternative as soon as the "b" word is mentioned.

Job cuts can also be an indicator of an ISP's health. The CNET (cnet.com) technology news Web site usually carries news about job cuts at most mid- to large-size ISPs.

If the company is not publicly traded, watch the level of service. If e-mail becomes unreliable or you have trouble reaching service representatives, start shopping for another ISP.

Options after implosion

So it's R.I.P. for your ISP.

Now what are your options?

First, contact the service staff. Reputable companies will retain a staff at least briefly to help customers find new connections.

If the ISP has bolted for Chapter 11 protection, another company may be lining up to buy the assets. In this case, remain in contact so that when — and if — refunds are parceled out you're in the front of the line.

If you have broadband and your ISP is struggling, ask for free dial-up service until your fast service is restored. If that fails, and it probably will, keep track of your down time and demand credit when — and if — you're handed off to another ISP.

If your ISP automatically bills your credit card, you can stop payment even if you've signed on for a block of time. Technically, you're bound by the contract, but an ISP on life support isn't going to have the time or resources to come after you with much more than a form letter.

If you've paid in advance, some credit card companies such as American Express that offer consumer protections might also allow you to dispute charges for service not fully delivered.

If all else fails, go to your state public utilities commission. While PUCs don't have any direct regulatory authority over ISPs, they can help put pressure on them to cough up refunds as can your local Better Business Bureau and your state attorney general's office.

If your defunct ISP has decided to play hardball, cut your losses and get more reliable service. Retaining a lawyer or going to small claims court probably isn't worth the time or money.

Buyers' checklist

So you're back in the market for an ISP — one that will last.

First determine the kind of service you need — dial-up or broadband — and "need" is the operative term here.

Experts say now is not a good time to get broadband as telecommunications industry shakeouts, pending legislation and regional monopolies have stifled customer service and destabilized the market.

"Unless you need broadband for work or because you're using complex applications on a regular basis, I personally wouldn't bother with it right now," said Om Malik, who covers the telecom industry for Red Herring magazine. "It's just not worth the trouble.

"And for most people, the applications just don't justify the cost or the headaches."

Most broadband service comes either via cable or across the phone network through what's known as DSL (Digital Subscriber Line).

If you haven't experienced any DSL nightmares firsthand, you've surely heard the stories: monthlong delays to get connected, spotty service, poor support, or at least expensive service.

And while cable broadband tends to be a bit more reliable, it has had its share of problems as the Excite@Home story illustrates.

Once you've figured out the type of service that's best for you, here's what to look for in an ISP:

• Network reliability

If you can't get online, nothing else like bandwidth or cost matters. Ask your prospective ISP about its network reliability record and its redundancy features, i.e. backup connections to the Internet backbone.

Large ISPs like America Online (aol.com) and EarthLink (earthlink.net) tend to be more reliable than mom-and-pop operations. But they are also more difficult to reach if there's trouble.

• Support

Call the ISP's technical support line. Then call the billing number. If the same person answers, move on. Be sure to ask if the person answering both lines is an employee or working for an answering service. Does the ISP have 24/7 service? If you're going to get broadband, ask what a house call to help hook up service will cost if it doesn't go as easily as the company promised. In some markets, it can run $200 to $500.

• Cost

Evaluate all the payment options. Many ISPs will cut you a price break if you buy service a year at a time or if you commit to an extended contract that includes regular monthly billing through a credit card.

Here's where you have to balance savings against potential collapse and loss of service and money using the above criteria.

	What ISPs are doing to stay afloat
	Here's a look at the strategies of several large, national Internet service providers.
•	America Online: A subsidiary of media giant AOL Time Warner and the largest ISP in the country, with more than 31 million users. Despite a recent price hike, AOL service continues to grow at a steady pace, which AOL attributes to its wide range of custom content.
•	MSN: The second-largest ISP with more than 7 million members. Its dial-up and high-speed services are closely tied to Microsoft technologies, including Passport and .Net for e-commerce and MSN Explorer for browsing Web pages and using e-mail.
•	AT&T Worldnet: Initially attracted subscribers by offering discount rates to AT&T Long Distance customers, and last year the company sold plans for as little as $4.95 per month for folks who didn't need unlimited service. As competition has become tighter, AT&T has pulled back on some of its discounts and promotions, but it still offers some value plans.
•	EarthLink: Continues to build its subscriber base by acquiring small, local ISPs and adding their clients. Earthlink also is aggressively selling high-speed DSL with several partners. The company also includes bonus services such as Spaminator, which helps keep your In-box free from advertising.
•	United Online: Formed by the merger of discount ISPs NetZero and Juno. Investors in the new company say they hope the subscriber base from both companies combined with low-priced dial-up access (even free in some cases) will keep the new ISP afloat.