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COMMUNET Home

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COMMUNET  October 1996, Week 1

COMMUNET October 1996, Week 1

Subject:

Re: Low cost isp's

From:

"Craig Silva" <[log in to unmask]>

Date:

Wed, 2 Oct 1996 11:45:33 +1000

Content-Type:

text/plain

Parts/Attachments:

Parts/Attachments

text/plain (104 lines)

On 30 Sep 96 at 20:18, Brent Wall wrote:

> Steve,
> 
> It may be fair to say that you and I, and many others for that
> matter, have been on the other side of the fences on the matter of
> charging for community based internet services.  (Based on this
> post, I fuly expect all quantities of vitrol on this from local
> zealots.)  As a left wing cinic, I find it interesting, if not sad,
> that you too, a long time advocate of freenets to folks, now
> considers fee based services for some of your subscribers.

Perhaps if people see an internet service as akin to a telephone service 
they will start to understand. The simple fact is that someone has to 
pay - once upon a time it was your benevolent university that paid 
the internet bills. However that was when not too many people had the 
equipment to actually take advantage of the freely offered service. 

On the other hand, the takeup rate on internet services 
is such that prices are dropping to levels where they are affordable 
to most of the non-poor. Its interesting that we no longer see much 
argument about the poor's right to free telephone access.

- as regards the left wing label - good left wing politics should
have a rational  grasp of economics. 

> As one who has been forced to study economics and Bismark's Real 
> Politics, I have long advocated that freenets are a chimera.

(You could also try Marx, Lenin and Mao :->)

> The  numbers, Steve, just will not work, eventhough they do now, in the 
> long run they will not. (And on this, I seek all optimistic
> challenges, in hopes that I am wrong).  

Sorry - you're right.

>Fee-based services, joint
 > ventures with ISPs, and the like--given the market ethos of this 
> nation

(insert global market :->) 

--just do not fit this "self-sustaining" model as the NTIA so  deems it.
 
> But just is what wrong with the Robbin Hood model:  charge your
> non-profits, your for-profits, and all of those who can pay a
> surcharge.  With these, fund and then underwrite your community in
> need.  I fail to see what is wrong with charging those who can to
> support those who cannot.

I once ran a community based printing business with this model in 
mind. Unfortunately you end up being caught between a rock and a hard 
place. Creaming off profits ( perhaps surplus) to subsidise the 
non-wealthy is a particularly difficult task. A capitalist will 
re-invest profit in capital goods to be able to deliver greater 
economic efficiencies. This in turn puts pressure on those competing 
in the same market to match those efficiencies - if you don't have a 
surplus to reinvest (i.e. its subsidising the non-wealthy) then your 
ability to match the prices of your capitalist competitor is very 
quickly eroded. Eventually you find yourself offering at the same 
price an inferior product and the only thing you are left with as 
regards marketing is customer philanthropy - not a very sustainable 
model. This of course discounts the value added by being a community 
network (community information etc although this may be available to 
anyone connected through the net already)  but this will/can be overcome by 
by the entrepeneurial capitalist.
 
> Do we need to wail about this, or just do it?  Unless, of course,
> those institutions who have and those individuals who have, don't
> give a damn about those who don't.

(Customer philanthropy)

  I have never met a UF agency
> that didn't have some loose change hanging around.  And this
> observation probably goes for every other private, public, and
> quasi-pubic institution.

A key point here is service - once you start charging - your service 
has to be good - you can no longer try to justify deficiencies with 
excuses - good service costs real money and good equipment.

> In these days of me first, this denial of funding availability, may
> just be the new American Model of institutional deceit.

If its to work you have to provide as good a service at a reasonable 
price - this doesn't leave a lot left over to subsidise the 
non-wealthy. You'll also find that its extremely difficult to sustain 
the community service ethic in such an environment - very quickly you 
will find it difficult to differentiate yourself from your capitalist 
competitors. 

The market imposes a very strong discipline.


craig
---------------------------------------------------------
Craig Silva, Electronic Outreach Program Officer
Victorian Health Promotion Foundation, Melbourne Australia
e-mail: [log in to unmask], Tel: 61 3 9345 3211
Post: PO Box 154, Carlton Sth Victoria. 3053. Australia
---------------------------------------------------------

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