ISPs AT THE CROSSROADS

Of all the questions facing ISPs, perhaps the most important is, "What do you want to be when you grow up?" Faced with a market in which Internet access is becoming a commodity, churn is an everyday reality and new competitors pop up overnight with no investment, ISPs are being forced to plan their long-term futures using maps that are sketchy at best.

At last week's ISPCON in San Jose, the question increasingly was answered by vendors with an array of new turnkey services. Gone are the simple box manufacturers selling racks of modems and banking on superheated growth to fuel the market. In their place are vendors and many brand name carriers offering a laundry list of "sticky" services, including billing and operational support, wholesale voice over IP, DSL access and broadband content delivery to let ISPs stand out in a crowded market.

"Offering access alone just won't do it anymore," said Brian Fitzpatrick, president of carrier services for Global Crossing North America, which used the show to unveil a new set of services geared specifically to the ISP market.

The company's ISP Advantage brings together local access, co-location and data transport with Global Crossing's network and online management systems. The resulting package gives ISPs the ability to extend their reach across 40 markets without installing their own infrastructure. In addition, the company has started offering an online network management tool, dubbed uCommand, that lets ISPs manage all portions of the ISP Advantage service from a single location.

Agis, the Bethesda, Md.-based data service provider, announced that it will support Novell's Internet Caching System with its Express-Connect Plus solution. The objective, said Anthony Palma, chief marketing officer of Agis, is to give ISPs a managed access service option that lets them use their existing infrastructure.

Also capitalizing on what already is in place was the objective Ariel, which announced last week that it would team with integrated service provider MegaWorld to develop and eventually deploy a new Internet backbone access service. The service will enable ISPs, competitive local exchange carriers and other service providers to reduce operating costs so they can provide economical Internet access and control over SS7 networks. Network buildout will be completed by 2001.

Among all the new services being pushed at the show, perhaps none could become more sticky than the IP voice package from GRIC Communications. GRIC, which includes more than 400 service provider members, is looking to move into the smaller ISP market, said Bill Cartmill, senior product manager for GRIC. "ISPs have to react quickly to get new services to their customers as soon as they can," he said. "Small ISPs in remote areas have an opportunity to compete with the local telephone companies and can offer less for connectivity. And because AT&T and MCI [WorldCom] are not going to give up market share, smaller ISPs have to originate traffic. If they are going to get into business, they must first get their feet wet."

ISPs should start with prepaid calling cards, Cartmill suggested, adding that they should target a segment that is small enough so it does not show up on the radar screen of a company such as AT&T, he said.

In other show-related news, Convergys introduced a new billing service bureau package geared specifically at ISPs. The new Catalys solution, part of the company's Connections family of products, allows ISPs to rate and bill complex IP-based services.

The package uses a client-server architecture and can be licensed, though the company expects most ISPs to opt for the service bureau option. "Most of these guys are too busy expanding to worry about things like billing," said Sanjay Patel, director of marketing for Convergys' Internet solutions unit.

Kelly Carroll contributed to this report.