When will 128M not be enough?

Roeland Meyer rmeyer at mhsc.com
Mon Jul 16 06:14:05 UTC 2001

> From: Andy Walden [mailto:andy at tigerteam.net]
> Sent: Sunday, July 15, 2001 3:02 PM

> A unique situation such as the CW/PSI mess would 
> have called for a prefix filter tweak, which, albeit, not automatic,
> painless on a small scale (i.e, you don't have to change hundreds of
> customer routers because they don't have the talent themselves).

I disagree that the CW/PSI mess is unique. My analysis leads me to think
that it might be a foreshadowing. Many of the mid-tier ISPs, and some of the
larger ones, are over-extended on growth and short on revenue. They were
caught by surpise, just as much as the rest of us, when the dot-com market
tanked. That sucking sound you hear is the rest of us being dragged in.
Those of us that have enough bank-cash to hold onto and sufficient revenue
to resist the pull, will be successful.

Two points, the DSL market (RBOCs are moving in) is soft and the wireless
ISP market is soft (I hope Ricochet survives).

The point is that one cannot assume that PSInet will be the last of those.
The failure-mode is exactly the same as that for WebVan, excessive (debt
funded) growth, excessive burn-rate, not enough revenue, and too long to ROI
(not enough cash in the bank to last until profitability). Many ISPs are
slicing the baloney so thin that you can see daylight through it. No one
expected the market to collapse and impact revenues the way that it has.
Couple this with a market that is used to getting everything for free and
you have a major problem brewing. Monetizing such a customer-base is very
much harder to do, than to say.

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