from Internet Business
The Access Provider's role is to provide connections to the Internet for
a relatively large number of clients within a local telephone district.
An Access Provider will have a large bank of in-dial modems and, increasingly
ISDN lines, each of which can be allocated for permanent or dial up connection.
These connect to the Provider's host computer(s) which provide such basic
services as e-mail collection and on through one or two trunk connections
to other nodes on the Internet.
Statistics indicate that a limited service can be provided to 50 users per
dial up line, with Providers increasing their costs while improving and
quality of service by reducing that ratio to as low as ten users per line.
Access Providers may also provide a limited set of Host
Services for their clients. Access charges vary from under $1 per hour
for services which keep their utilisation rates high and their costs low
to around $6 per hour for prime rate dial up access. A range of purchase
plans and extra services are often offered.
This area of the business is maturing rapidly, with increasing economies
of scale in the larger telephone districts
allowing clear differentiation of service quality and charging regimes.
It is expected that those areas to be passed
by the roll out of cable by Telstra and Optus will soon be offered data
connections which will make it hard for current Access Providers to remain
However, one significant area of opportunity can be expected to have a longer
life. In smaller semi-rural telephone districts, the costs of Telstra's
Austpac and 013 connections to remotely located Access Providers remain
prohibitive, so there is a place for a local Access Provider in each such
telephone district. Even when cable comes to the larger towns, the increase
in demand from out-of-town users should balance any losses. By siting a
preconfigured local access module in a suitable local business, per site
costs may be kept under $100,000 to service 1000+ users. Utilisation monitoring
software can be developed to allow a range of different standards of service
to be offered so that one Access Provider can adequately cover the local
market. Governments have serious concerns about equity and access and are
likely to look favourably at any private initiatives which enable their
social objectives to be met within an increasingly deregulated market.
Given profit sharing arrangements with local business partners and a staged
deployment of at least ten sites, return on an investment of $1.5 million
could be expected to average better than 50% per annum for at least five
years. This could be scaled in Australia alone to at least 40 sites. It
is unlikely that the first serious entrants into this market will be subject
to much real competition.
 e.g. Sydney and Melbourne
 This assertion
is seriously challenged by the December 1995 announcement that an Access
Provider would be a key member of a Sunnyvale, California, trial roll out
of 10Mb cable modems.