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On Starting a Successful ISP?

Cliff posted more than 13 years ago | from the born-in-a-shrinking-market dept.

Technology 216

Tigris666 asks: "I would like some handy hints from all /.'ers on what is needed in order to start up an ISP. I'm asking you guys in hope that someone out there has started one before, and i think that's a fair assumption. There are obvious things like mail/web servers, dial-in modems/systems, tech-support employees. But what i'm looking for is an idea on costs (we're talking Australia here), hardware required, and basically an idea on how hard it might be? Things like setting up the internet link, organising the phone lines to be put in, how many servers are needed, and the big thing! Is it all worth it? Does it pay off in the long run?" With larger fish finally jumping into the waters of Internet connectivity, is there still room for smaller companies? I would think that any new ISP would not be able to survive by solely providing dial-up service, and would need to look into the possibility of providing DSL or cable connectivity. However, providing broadband connectivity is a significant and expensive venture, made even more difficult considering the current economic conditions. What suggestions do you have for anyone who thinks themselves up to it?

"Basically the idea came up because the area I am from is in the country. There is only 1 service provider out there, and they are really bad with disconenctions, among other things, and everyone i know absolutely hates them. I think starting an ISP would be a good oppurtunity. I have recently moved to the city to get a real job, however I much prefer living in the country, so this will certainly be a big step."

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Let's cut to the chase... (1)

Anonymous Coward | more than 13 years ago | (#240364)

in the US, the principle problem of starting an ISP now is that users are moving toward broadband connections. These connections are have higher infrastructure costs and the market is being squeezed out to the phone companies and cable companies.

Since you said you were in Austrialia with only one ISP provider, I assume that you are where the US was roughly 5 years ago. This assumes that most people do NOT have cable service and the phone companies aren't likely to have DSL for at least 3 years.

If these statements are true, then becoming an ISP may be a viable option. The key cost is that of the point-of-presence. Check around with Sprint/MCI and check the costs of a T1 or T3 line with access to the internet. Costs for a T1 (back when I checked it out) were roughly $1000 per month. (Phone lines are much cheaper - $20-$30 per month). I strongly recommend basing the location of your servers on the location your T1.

As for the back end servers, there are commerical grade routers available that connects directly from T1 to modem.

Here are complete instructions (3)

emil (695) | more than 13 years ago | (#240369)

I published this a few years ago for Unixworld. You will want to use the PAM (RH5) configuration.

A single Pentium 150 handled 32 lines with no problem. []

Economics (2)

maggard (5579) | more than 13 years ago | (#240378)

First I'd suggest researching the market you're going into. /. is great for geek-stuff but what you need are Aussie-dollar numbers, and locally relevant ones at that. (Many /.'ers are unaware there are countries outside the US borders with their own internal markets, pricing, laws, etc.)

First find out more about your potential competition. Call them up and ask for a technology description. Use local newsgroups & find some talky techies, get more detail. Possibly pose as a customer with detailed needs, get more information (be careful here - this could be a legal problem that would come back & bite you.) Now find a couple more similar ISPs around and discover what they use, how they charge, etc. Try & determine how healthy they are.

Details you'll be wanting are the technical specs but also how many customers do they have, what do they charge residential customers, what do they charge commercial customers, how many of each type of customer do they have, exactly what services do they offer, etc.

Now look at their upstream suppliers. Who are these companies using for upstream feeds? What is it costing them? What services are available? Try & determine if there are non-compete clauses in place.

Next familiarize yourself with the local applicable telecom laws. What rules govern the ISPs? What rules govern the phone companies you'll be working with?

Finally what are the conditions of the local infrastructure & economy? Are the phone-lines in such poor shape that disconnects are inevitable? Are there enough customers to support a robust ISP or is so-so service all that makes sense economically?

As many /.'ers will tell you in most parts of the world the PTT's are successfully killing off their competition. Presumably you'll be competing with your own local phone service, offering an alternative to their ISP (assuming they have one.) Do you think you'll be able to work with them? Have others been able to work with them?

With all of the groundwork in place consider if you can take on the job, or at least catalyze it / make a profit somehow.

Are you competent to start or run an ISP? Do you have access to folks who would be interested in going in with you, helping flesh out the plans into a working set of papers and if you were to somehow set up shop could / would they take positions in it? Can you develop & pitch a business plan? What would make investors likely to give you money, help you get started?

Finally once you've got all of the numbers in place will it be possible to make a profit or would you be better off spending your time on something else? Will you be able to put together the capitol, the technology, the support, the services, the advertising, the billing, the relationships in order to make this fly? Do you have what all of this takes?

Frankly I think the days of the Mom 'n pop ISP are over, muscled out by bigger companies with more capital, advantages of scale & connections.

Where I do see smaller ISP's making a comeback is in boutique-ISPs where specialized services are offered & overhead is kept low by expecting the customers to be technically proficient & help themselves. These geek-only services are often low-key & word-of-mouth deals run as a sideline by some enterprising local geeks. Things they offer are lots of access to some good webservers, gamer-services, IRC servers, newsfeeds, etc. These seem to make a reasonable profit but are self-limiting, probably won't support anyone directly.

Aside from that the big boys seem able to starve or crush their competition with often the issue coming down to which one hates less - the cable company or the phone company? In rural areas it comes down to the phone company or the satellite company but either way it's two giants.

Re:Wireless? (2)

zaf (5944) | more than 13 years ago | (#240379)

I agree. Wireless is the only way to go.
Dial-up has incredibly small margins--you'll end up making pennies per customer.

DSL is the game of the Telcos.. you'll end up re-selling someone else's service.

Cable is even worse.. It's resell or lease connections.. both are next to impossible in the US, don't know about AU.

Wireless is the only way to have complete control over your margins, and still make a profit. The initial equipment costs are high, but they are for the other options too. Though, in a rural area, you may possibly be able to find some cheap tower space (farms with CB towers or radio station towers), or even build your own tower. With the right equipment you can reach pretty far, and with a good network topology you can break your access points geographically and hop to many neighborhoods.

Dialups? DSL? No. (1)

SlapAyoda (6041) | more than 13 years ago | (#240380)

I worked at an ISP for a year, and although they went under recently, I can tell you the do's and don'ts that I learned from my company. Firstly, the cheapest and least demanding way to get customers and hence income is definitely not dialup or dsl. The latest equipment is too expensive, and each user only provides a small amount of revenue - less money than your tech support time is worth. After awhile, in fact, we let our dialup users continue to use the system, and we stopped billing them. So when they'd call we'd tell them that support was for paying customers only. If they tried to pay us, we'd tell them that we no longer offered that service (even though they were currently using it) :). Hey, it's nicer than shutting them off outright. So how did we make our money? Simple. Reselling frame relay circuits. This of course cuts out the home user, who has no need for such a big link, but that's better anyways. It's much easier to deal with a dozen customers who give you $500/mo than a hundred that give you $5. We'd buy frame relay circuits in bulk from GTE or Pacbell and resell them to midsize offices as a 'value-added reseller'. Where this value comes in, I'm not sure - I guess it meant that when the circuit went down they'd call us and we'd call GTE/Pacbell for them. But hey, people paid us. :)

DSL - No money to be made. (1)

fatboy (6851) | more than 13 years ago | (#240381)

With larger fish finally jumping into the waters of Internet connectivity, is there still room for smaller companies? I would think that any new ISP would not be able to survive by solely providing dial-up service, and would need to look into the possibility of providing DSL or cable connectivity. However, providing broadband connectivity is a significant and expensive venture, made even more difficult considering the current economic conditions.

Three friends and I started an ISP about a year and a half ago. We have made some money with dialup, but by far have made more money with webhosting and programming services. With DSL there is _NO_ way to make money unless you charge about the same price as a frac T1. The telco's have you over a barrel and are not willing to resell the service for a reasonable price. My suggetion to you, don't do things that can't pay for themselves. You can't stay in business if you do not break even.

Economies of Scale (1)

Xunker (6905) | more than 13 years ago | (#240382)

I was involved with an ISP startup a few months ago. The owner has some very interesting business strategies and offered interesting technologies. It was going fine.


He had to shut it down. Why? Because, although he was making money, the user base wasn't growing at a fast enough rate to the point he would be able to pay us all a _real_ salary. The compnay could support itself, but it could not support the people involved in it.

The key here, I think, it Capital. If you really want to be sucessful, you need to have enough stored capital, not to run the company, but to pay your employees, including yourself. You need to have enough cash at your disposal too keep the human side running while the business' user base grows to the point where it can sustain itself.

Reruns, again? (2)

Syberghost (10557) | more than 13 years ago | (#240384)

Not only has this already been asked, but Cliff posted the story [] .

Nothing important has changed since that story was posted. Use the search feature at the bottom of the page.

Re:Best Advice (5)

matth (22742) | more than 13 years ago | (#240396)

A friend of mine and I have started an ISP for very few start-up costs. We accomplished this by renting lines from UU.NET and then we provide the mail/radius, etc servers. They are in a data center. So it's been very inexpensive for us, and the dial-up line quality seems to be very good frmo UU.NET

Swift-Networks - Nation Wide ISP! []

What I would do. (1)

Pahroza (24427) | more than 13 years ago | (#240398)

I've tried to find some independent local providers here in Atlanta and failed miserably to turn up anything worthwhile.

Having said this, if you become successful, please don't sell your business to the first corporation who comes along and offers to buy you out.

Grow your business at a reasonable pace.
Don't keep changing the "focus" of your business or your "target audience".

It terrifies me that I don't have much of a choice in who services me anymore.

Do I want a fast connection? Yes. Ooooooh yippie, you mean I can choose from TWO providers?! Wow. Do I want a static IP? Great, that limits me to.... one.

Above all else, try to make your customers happy. If you're being completely swamped with complaints, you're doing something wrong.

If a customer has to wait on hold for 3 hours to get something fixed, you're doing something wrong.

Don't become to egocentric. If you do succeed, remember that it's your customers who put you there, try to treat them with respect.

I long for the days when customer service was customer SERVICE, not "let's give them the runaround until they hang up because they don't have a choice anyway"

Australia? Who the U.S., now... (5)

RavenDarkholme (27245) | more than 13 years ago | (#240401)

Not knowing anything about Australia and telco costs and so forth, I can't really comment about that. (So why are you posting??)

In the U.S., though, I've worked for an ISP who goes into a lot of little towns where there is no (or little) ISP service. They usually start out with 12 phone lines, which in US dollars is about $300 a month, and a frame-relay 56K connection back to the main ISP which is another couple hundred dollars a month, an Ascend Max 4000 or Portmaster III which you can get on eBay for not too much.

Webserver/mail server/DNS server? Heck, get a couple of lower end Celerons with, say, 128 megs of ram, a couple of 20-gig hard drives, throw Linux with Apache, Sendmail (or Qmail), Radius of some sort (I rather like FreeRadius) and BIND on them, and Ka-boom: instant servers.

Generally, what they do is say to the town: something like, you guarantee us X number of users, and we will bring Internet service to this town. Many times, the people will sign up (and pay!) for service before the ISP even gets out there, thus making it more or less a sure thing for the ISP (and for the users, since if they don't get enough people, the ISP gives the money back).

The big ISP's pretty much ignore smaller communities, so there is still a very large untapped market (at least in the US) for Internet service to small towns or rural areas. You can actually get quite a lot of users online before you have to get more phone lines and higher bandwidth, as well.

So, to sum up: minimum needed to be an ISP in a smaller town:
  • Internet connection, at least 56K Frame relay, or higher.
  • At least 12 phone lines.
  • Dialup server (e.g. Ascend Max 4000/Portmaster III, or linux box with multi-line modem cards)
  • Web/DNS/Mail/Radius authentication server Celeron 400, 128 meg Ram, 20 GB drive to start out. You can make these separate servers, but I've seen people run up to 500 virtual apache domains and about 10,000 email boxes on the same machine.
  • Ability to remain calm under all customer calls.
That's my 2 cents. :-)

So you wanna be an Internet Service Provider (ISP) (1)

SEWilco (27983) | more than 13 years ago | (#240402)

Particularly in Australia, you surely want to read "So you wanna be an Internet Service Provider (ISP)" [] . Those not in Australia will also find it very informative.

Then open up a spreadsheet and figure out the financials yourself.

Re:Two Important Words: Think First! (2)

spankenstein (35130) | more than 13 years ago | (#240404)

I think that a lot of people are missing the point and have never beedn in the situation that he is describing

For most of my life I lived in a rural town. To call ANYWHERE outside of that town was long distance. There are still alot of towns like this. In this situation for internet access you pay both your provider and HUGE long distance bills.

I would have had access much sooner had there been something like he is describing.

A lot of the people that post here are like me and spoiled by broadband. Well... That's not available everywhere.

Re:Two Words... (1)

Tower (37395) | more than 13 years ago | (#240405)

actually, 10mb would be milli-bit.. even worse.

Re:You got to be joking... (1)

Flounder (42112) | more than 13 years ago | (#240407)

That, and they've got a free pork chop dubber on the first Tuesday of every month

Mmmmmmm, pork chop dubber.

Just like Mom used to buy.

Best Advice (5)

Flounder (42112) | more than 13 years ago | (#240408)

There is an ISP in Hawaii that provides very inexpensive dial-up service, with a catch. No tech support. Period. They send you a sheet with your dial-up settings. And that's it. For experienced users only.

Tech support for newbies is, by far, the biggest pain in the a** for an ISP. Eliminate them, the job of running an ISP becomes almost enjoyable.

How to succeed in business without really trying (1)

brianvan (42539) | more than 13 years ago | (#240409)

And tomorrow's Ask Slashdot: How to start a successful chain of gourmet coffee restaurants!

Gee, I should be submitting my homework questions to /. as well; after all, the TA isn't around 24/7 like you people are. Besides, compared to some of the stuff posted on here, my homework is very important.

Re:How to succeed in business without really tryin (1)

brianvan (42539) | more than 13 years ago | (#240410)

I hate to reply to my own post, but someone modded it as Flamebait, and I have to respond to that accusation.

There is a load of technical, financial, and industry-related information available about a wide number of topics. One of the very important steps to be taken in beginning any business project is to DO YOUR RESEARCH! And it's one of the talents of businesspeople to be able to take an abstract idea and fill in all the details.

The fact that this story was posted on Slashdot does a grave disservice to a lot of people involved:

* The Slashdot community sees an Ask Slashdot where a relatively vague and unnecessary question is asked... never mind a question posed arrogantly enough to assume we should tell him how to start an ISP. I'm not saying that the author of the question meant to be flamebait himself, but perhaps they are inadvertently being lazy and helpless. Some Ask Slashdot questions are actually quite interesting, yet get posted on the back page and recieve 4 or 5 comments. Why this happens, yet this one gets posted on the main page, I don't know.

* The person asking the question himself is doing himself a grave disservice by asking such a broad question on here without actually going through the steps that it would take to make a successful business plan. He's enlisting us as his consultants... while some of us don't mind being armchair consultants, it's like asking the people who call into sports radio shows to do the Super Bowl coverage. We don't know shit because we don't do research, and even if we did research on the business plan he needs, we'd never be able to tell him everything in one posting. He should go out and do his own market and business research so that he is BEST able to make a decision on his ISP idea.

* The future customers of this ISP are potentially going to be buying a service from a person who asked how to run his business on Slashdot. I already feel sorry for them.

I admit, I'm being a bit drastic, overdramatic, and exaggerating here... but the moral of the story is the same. The best helpful advice we can give this guy is to do his own research. Ask Slashdot is helpful when the guy has a very specific technical question, and even then it's a bit questionable that this is the proper forum to ask those kind of questions (it's alright, I guess, but not perfect). But for such a general and broad question, this guy has got to find the answer for himself.

My sarcasm doesn't quite help the situation, but I thought I'd use it to point out how thoroughly ludicrous it was for this question to make it to the front page. Then again, Slashdot isn't my site, so they can run it however they want...

Here's a good overview (2)

CrayDrygu (56003) | more than 13 years ago | (#240413)

My boyfriend chose this question for a project for one of his college classes. His report goes into a lot of details you probably already know or don't need, and doesn't go as far in-depth as it should if you were actually using it as a guide to starting an ISP, but it should be a good starting point.

How to Build an ISP []


Two Words... (1)

pipeb0mb (60758) | more than 13 years ago | (#240415)

Virtual ISP.

Why a vISP?:

No hardware to buy

THOUSANDS of national access numbers

You can make a tidy profit in rural areas by simply running a newspaper ad.

How:In the area I just moved to, there is very little DSL/Cable. The only local ISP charges $24.95 per month. I have just signed with a vISP tp provide service here, and I am being charged $8.00 per account. I can charge a paltry $15.00 per month, make a decent profit, undercut the other ISP, and offer the user the SAME phone number the local guy uses, as well as a 10mb website, 2 email addresses and free tech support
Amount of work by me?

Run a 16th page ad in the local paper.
Setup a website with a signup form.
Create a set of FAQs, mainly based off the thousands of available ISP websites and my personal experience in Tech Support.

DialUp USA [] - My provider
Google vISP Search Results []
Google-vISP- UK Results []
CNET ISP Pricing Chart [] -You can still offer lower rates than any of these!

Bottom Line: 500 users x 7.00 profit = $3500 a month. Think about what you could do with a few ads and a few websites in different areas.

Re:Two Words... (1)

pipeb0mb (60758) | more than 13 years ago | (#240416)

One More Link:

vISP's in AU - Google []

Re:You got to be joking... (1)

cetan (61150) | more than 13 years ago | (#240417)

Not all. You just have to look for them.

I use a "mom and pop" for my dialup and I love it. Very personal support, competative rates, decent speeds.

guesstimates (1)

joq (63625) | more than 13 years ago | (#240419)

It'd be hard to find someone to sell you IP address blocks nowadays, (I know class A's are close to impossible) so that will be a big factor thats for sure.

Well I would say for the mail and DNS servers you wouldn't need anything fancy since they're not processing scientific stuff or crack rc5 or so. So for mail servers even a couple of pIII's would be good.

Routing equipment... Having tinkered with only BayNetworks, Cisco, and Juniper, I would say stick with Juniper Networks (possible an M160) for large BGP networking (OSPF is a pain), for internal you could use like a BayNetworks Centillion. Cisco is overrated to me. Or if you really want to cut corners then get a Sun Ultra10 and slap on Zebra [] (but thats rather ghetto)

If your going to be doing VoIP stuff, PBX's are rather expensive, but I would look into the Merlin's from Lucent which was a fairly good experience for an older company I worked at, and it was the cheapest. However timeframes to get PBX's involved out here suck so if your local telco is in the same market as a vendor your looking at, prepare for a wait.

I don't know the prices of everything entirely (since my co is partnered with many we see discount prices on all this crap) but it can go into low-mid 6 figure digits.

guesstimation (1)

joq (63625) | more than 13 years ago | (#240420)

It'd be hard to find someone to sell you IP address blocks nowadays, (I know class A's are close to impossible) so that will be a big factor thats for sure.

Well I would say for the mail and DNS servers you wouldn't need anything fancy since they're not processing scientific stuff or crack rc5 or so. So for mail servers even a couple of pIII's would be good.

Routing equipment... Having tinkered with only BayNetworks, Cisco, and Juniper, I would say stick with Juniper Networks (possible an M160) for large BGP networking (OSPF is a pain), for internal you could use like a BayNetworks Centillion. Cisco is overrated to me. Or if you really want to cut corners then get a Sun Ultra10 and slap on Zebra [] (but thats rather ghetto)

If your going to be doing VoIP stuff, PBX's are rather expensive, but I would look into the Merlin's from Lucent which was a fairly good experience for an older company I worked at, and it was the cheapest. However timeframes to get PBX's involved out here suck so if your local telco is in the same market as a vendor your looking at, prepare for a wait.

I don't know the prices of everything entirely (since my co is partnered with many we see discount prices on all this crap) but it can go into low-mid 6 figure digits.

As for the negativity with everyone stating its a losing venture, you fail to see that not all countries have the same availability as we do so it may be a winning venture there.


a business perspective (1)

mckwant (65143) | more than 13 years ago | (#240421)

I've done a paper on e-startup businesses, although I know nothing about the Australian ISP market.

To be honest, you've got a really tricky business proposition here. One big problem you're going to have is how to differentiate your ISP over all the others, while maintaining a cost competitive profile.

Just starting out, you've got a substantial scale problem, in that AOL, or whoever serves such a purpose in Australia has you beat on infrastructure, period. Their help desk/bandwidth/server structure will be bigger than yours, and more extensible. Note that I'll use AOL as a proxy for "the large Aussie ISP" from here on out.

Similarly, I suspect there's nothing you can do that AOL can't emulate, imitate, or outright steal. Even worse, your lawyers are going to pale in comparison to the amount of work AOL's lawyers can throw at them, so even if you catch them, it's possible that AOL will just keep it in court forever while you spend money and (more importantly) personal bandwidth on the lawsuits.

To be blunt, I can see why one might want to do this from a technological standpoint, but that's completely different from attacking it as a business.

A couple of ideas:

1) Do a target market survey. Whom, exactly, do you want to serve? What are the implications of that market? My guess is that you can't compete with the AOL in getting newbies to sign up, but maybe there's a anonymity thing you can pursue among established internet users, which changes the demands upon your infrastructure completely.

2) Look for whitespace in the big ISP's offerings. An example would be examining closely what the big guy doesn't do, and attempting to fill that niche. An example would be web hosting, static IPs, etc. I have this problem with the cable ISP we use right now, in that I can't put my IP address in DNS.

Some other poster had a neat idea about small town internet access. What about extending that to nursing homes, community centers, etc.? You can go in, have control over the hardware, and maybe teach a class once a week to add value to the users.

3) Keep your business model flexible. There was an interview with Bill Hewlett about how, in the early days of HP, they did all sorts of stuff with the laser technology they had expertise with. They did a home security thing, a bowling lane foul indicator, and tons of other junk. No longer term strategy, just stuff to pay the bills. In that case, they had a hammer, and tried numerous nails to see if any of them would become absurdly profitable. In the meantime, their nascent company stayed solvent, which is nontrivial.

4) Get business people involved early. What is the problem that you are trying to solve for your users, and can you make money doing so? I suspect that doing a large scale ISP is untenable, considering the competition, so how do you get a niche? How do you keep the customers you sign up?

To summarize, know the people you want to serve, the pain you want to solve for them, and get cash flow before worrying about profit.

Other than that, it's just a matter of execution.

Good luck.

The myth of the failing mom & pop ISP (5)

PacketMaster (65250) | more than 13 years ago | (#240422)

I've done extensive contracting work for "local" ISPs and I can tell you that they are in no way on their way out. Most people out there are happy with dial-up and aren't interested in the prohibitative prices of broadband. I recently completed some contracting work for an ISP in Western Pennsylvania and they went from 0 users to 1500+ users in about 3 months. There are four major keys to having a successful ISP:

1) You have to be financially committed to grow. When your dial-in lines are full during peak times consistently you need to add more. Nothing will cost you users faster than an ISP that rings busy for 20 minutes before a user can connect. A good rule of thumb is to have enough lines to support 25%-30% of your userbase being connected at any one time. Keep good logs of connect times and if you need more lines, buy them!

2) Provide good service. People will stick with the ISP that provides good service to user's problems, even if it's slightly more than the ISP down the road. Get a good ISP management tool that makes handling your radius/dual-up authentication, e-mail and other services easy and hire a couple of minimum wage people with half a brain to field "1st Level" calls -- high school students would be perfect in this area. That'll take care of 90% of your problems with users who most likely can't type their password or fiddled with their settings. Turnover in these jobs is high, so make sure you have a dummy-proof system that makes training a new hire easy. There are many freeware FAQ/Knowledge Base applications out there to automate this. The one application you DO NOT want to use is ISP Power no matter what their salesman says.

3) Have a solid person or persons behind the technology side of things. Either do it yourself if you have the knowledge, hire someone knowledgable or contract out the work (what I do part-time). Corporate IT is a lot different than ISP IT. Hire someone who knows routers, Radius, etc.. They need to be articulate becuase you'll have an uphill fight with the local teleco for both your frame connections and your Dial-In BRIs. Remeber that local Telecos push their own ISP service and you will not get good support from them if you're an ISP. You need to have someone prepared for a long drawn-out battle who can provide sound answers and be able to monitor and gather data on bandwidth and performance with which to bombard the teleco's tech support. The first words out of their mouth will be "Do you have your router configured properly" and will hammer this at you until you prove conclusively that it's not your router. You need to pick a platform and stay committed to it. Pick an e-mail server that is EASY to configure and maintain. MDaemon for NT/2000 and Qmail for Linux/Unix/BSD are good choices. Pick a hardware vendor you can have a good relationship with. 3Com is an excellent choice for ISP type hardware. Very few ISPs needs the power of Cisco equipment.

4) Take security seriously. Your 31337 Skriptors love to find ISPs with little thought to security or else security that has gone lax. Enforce a password policy, keep good logs and have monitoring systems up and running. Have a zero tolerance policy for spammers and other crackers. Invest in at least a minimal firewall setup for your servers. Spend the time to learn the Unix tools for firewalling or look at a good NT package such as BlackIce (again depending on chosen platform).

You can still be very successful with dial-up ISPs. Broadband will eventually either become cheaper allowing local ISPs to compete in that area or the government will eventually crack those markets open. It's just a matter of time.

One last thing, offer Front Page extension support! I can hear the booing from the /. community on this point but that is what people want, especially from their local ISP. They don't want to mess with FTP regardless of how good the directions are. They want to use their nice shiny pre-packaged Microsoft Web Publication Wizard.

Re:Use WebDAV for MS FrontPage (1)

Dark Coder (66759) | more than 13 years ago | (#240423)

WebDAV is available with apache webserver so that can be used to cater to the MS FrontPage users.

To make a $100,000 USD as an ISP owner... (1)

Dark Coder (66759) | more than 13 years ago | (#240424)

For 240 users/24 simultaneous users, it would cost $695 USD a month for T1 dialup bank (PacBell) which is faster than T1 but much slower than T3.

To charge 9.99/month per user is a pitiful trickle-down to your profit margin (if you factor in your bandwidth cost, rack rent, electricity, IP Class-C address, maintenance of a grand total of $1250 a month). You can cut only so much ($150/m) by trucking your T1 line to your home.

If you want to pay yourself $100,000 a year (snicker) and work 90+ hours a week with account receivable, account payable, taxes, and unpopular tech supports for newbies as well as repairs doing this all by YOURSELF, you would need to attain a critical user base of 2,500, which of course, you'll have to install 250 more dialup lines, which spirals the cost up fast then slowly in an inverse logrithmatic scale to...

An actual critical user base of 2,800 is more like it to just attain your 100K/year salary.

By then, you'll want to start hiring specialists to offload your poor, tired, overworked mind.

Thus the vicious cycle begins of garnering more user base just to pay for those employees.


Re:Tough market... (1)

rkent (73434) | more than 13 years ago | (#240427)

One idea: serve up a geek-friendly service. The Internet has been dumbed down so much that those who would like things like a full NNTP feed or shell access have trouble finding it with the right combination of reliability and price.

Ahh! Yes, exactly! I've been wishing for so long that I could find a place like this in the desert of Qwest and AT&T. Of course it won't be the most profitable ISP ever. On the off chance that this is your primary reason for setting up an ISP (ie, you and your friends want "real" connectivity instead of going with a big dumb name), see about setting it up as some kind of cooperative. Hell, you could probably even get nonprofit status if you did it right.

But a mass-market, for-profit ISP? Good luck.


Small ISPs aren't making it (1)

foondog (87662) | more than 13 years ago | (#240432)

Most small ISPs there days seem to either get bought out or more often they just don't make it. It is hard to compete with the Big Boys.

Also there are so many options out there. You need an edge that makes people want to use your service over another. You need to ask yourself...what would make a person want to use my internet service over another service that probably costs less?

I don't think setting up and ISP would bo too difficult. The problem would get in getting enough customers to cover the costs.


We looked in to doing that a few years back... (2)

Greyfox (87712) | more than 13 years ago | (#240433)

I and a few friends kicked around the idea of doing that a few years back. After writing up a business plan and running the numbers, we decided that there was no way we could make a profit doing it.

Two Important Words: Think First! (5)

Joel Rowbottom (89350) | more than 13 years ago | (#240435)

There will probably be a lot of people say this, but the first answer which springs to mind is don't do it. It's very costly, and certainly no longer something you can do with a single Linux box and a DSL connection.

That said, if you do want to do it, first thing you'll need to do is make sure your business plan will be profitable. I know it's tedious, but sit down in front of a spreadsheet program and work it all out: hard questions include:

  • Is it feasible? You did say you lived in the country - there's probably a reason there's only one ISP.
  • Will it make money? If not, why are you doing it - you're going to have to work out how to pay the rent some other way if it's not going to pay.
  • How will you support your customers? When they phone you in the middle of the night because their printer's stopped working, have you got the patience to help them or tactfully tell them that it's not your problem?
  • What if your upstream provider goes bust? Once upon a time nobody thought this would ever happen, but after several major providers filed for Chapter 11... :(
  • Do you have contracts? Seriously, in this increasingly litigious world you can save lots of hassle, stress, lost sleep, and ultimately cash, by hiring yourself a good lawyer from day 1 who will make sure that all the limited liability blurb is in your contracts. There are a lot of bedroom ISPs out there who have fallen over through someone down the road taking legal action, and them not having the money to fight it. Hence the case doesn't even get to court and the ISP is bust. Be serious: get your contracts sorted and stick to them.
  • How will you buy all the kit? Dialup stacks and routing hardware don't grow on trees you know - however I've seen quite a few good deals on Cisco dialup kit on eBay [] , and if you're doing partial BGP to peer with your upstream providers a secondhand Cisco 3640 will quite happily do the job.
  • How will you manage the subscriber base? There are several prebuilt and homecooked packages out there, but you'll probably find that you don't really know what you need until you're up and running. Remember it's a rental system you're running, so you'll need to decide how to work the finances and contracts if someone cancels mid-term - do you refund them an unused portion of a month? What defines a "month", is it the number of days in that month or do you just split a year into 12 of them?

Now assuming you've asked yourself the difficult questions and got satisfactory answers, go out and find yourself a good accountant or at least someone who'll take care of the day-to-day finances for you. If you're a scatterbrained geek like I, then you'll have to reel in some favours perhaps. I use my wife for that sort of thing - it works quite well ;)

Then, and only then, do you start to work out your network map, and do all the fun stuff. Don't be a Dot Com ;)

Note: I've been brainstorming while writing this so there will be a lot I've missed out. I've rescued and set up ISPs and businesses before, some of which have succeeded and some of which have failed. I speak from experience of 1991 through to the present, so don't take this as a base course in setting up a business ;) - usual #include <disclaimer.h> I'm afraid ;)))


Where? (1)

Ronin441 (89631) | more than 13 years ago | (#240436)

Where are you planning to set up?

If it's in a capital city, then there's heaps of competition. Every phone company has an ISP on the side (Telstra [] , iPrimus [] , Dingo Blue [] , etc.) So you'd better not be planning on competing with those sorts of people on price, because they've got good access to phone company equipment, and good economy of scale.

There are still some opportunities to set up in country towns; look at kisser [] , for example. If this is the sort of thing you're into, then you need to be looking to someone who is running such a service for advice.

As to equipment, you have three choices: UNIX, Microsoft, or easy-to-admin embedded boxes. (Cobalt [] are a good starting point for these.) OK, so I'm simplifying a little. My point is that you have to decide what you're most experienced with, and then keep it simple, stupid. Don't mix Windows and UNIX. Yes, they can be made to play nice, but no, you don't want to double your learning curve.

One of the really fun bits in Australia is dealing with the phone company. 56k modems, at the non-customer end, don't reside on the ISP's property; they reside in the phone company's local exchange. (One of my friends was bemoaning the loss of huge racks of modems covered in cool flashy lights that used to impress the hell out of visitors.) That means that you hae to deal with Telstra, and since they are still all but a monopoly (particularly here in W.A.), they aren't particularly interested in dealing with you. The result is likely to be a nightmare. I dumped my previous ISP [] simply because the dialup I was using sucked -- the modem at the phone company end couldn't hear me clearly, and my modem couldn't hear them clearly, and the result was dropped connections galore. Of course, if you want to stay down in 33.6k land, then you can put rack modems on your own premises (and you could probably pick up some cheap secondhand from other ISP's).

Re:Best Advice (2)

neafevoc (93684) | more than 13 years ago | (#240439)

Yes, [] or known as or or some other ones.

I used them for about a year before I moved away from the islands. They're such an awesome ISP. A buddy of mine knew the admin, del, and he's a very funny guy. I guess del is just sick and tired of computer illiterate people.

It is funny [] , though. If you dig into their site, there's a rant and rave list of emails from their customers.

Also, for those who don't know Hawaii's pidgen talk, the letters are very humorous... only because I always though pidgen was silly. (A mixture of Japanese, Filipino, Chinese... basically all your Asian immagrants to Hawaii during the plantation days trying to speak English).


The Complete Idiot's Guide to Starting an ISP (2)

Pedrito (94783) | more than 13 years ago | (#240440)

I helped start up an ISP in a small town in Mexico (and still provide tech assistance to the current owner).

First of all, had I known what it was going to be like, I wouldn't have done it. As someone else posted, the newbie questions are a nightmare, and unless you're the only game in town, you're going to have to handle it.

As for equipment, figure on 1 modem for every 5-8 users to start with. You can expand from there. Get an AscendMax for the dial-in stuff (avoid multi-line serial strips and external modems like the plague. These things are a maintenance nightmare). Get Radius or FreeRadius, and some sort of ISP billing software. Not 100% necessary for the billing stuff, but it sure makes life simpler.

Okay, this is VERY, VERY, important for a small ISP with limited bandwidth: If you're running Linux (or another *nix), run Squid... It will save you TONS of bandwidth. We saw a 60% reduction in bandwidth when we installed it. This cuts down on your costs significantly, as you can add more modems with less bandwidth.

You can probably get by with 1 or 2 servers. A small ISP doesn't really need much in the way of processing power. We were running 32 dial-in lines and a couple of 64K leased lines to other ISPs in other towns, over a 512K line to our provider. Our most powerful server was a 300mHz Pentium II, I think. None of the machines ever approached 50% CPU usage.

I don't know what your situation is, logistically, but we did some wireless ethernet stuff as well, but that required getting a license (a real pain in Mexico) and then putting a transceiver on a tower (which we had to buy and have installed). From this we were able to offer up to 1M/sec to some of our clients (Internet cafes).

Most importantly, you ask, is it worth it? Tough question. The tech support is a nightmare. Because of competition, if you have any, you can't price things very high, so it doesn't make you a lot of money unless you're huge. You also need 24hr monitoring of the system, even if it's only a program that can page (via modem) you when there's a problem.

I certainly wouldn't ever do it again, but the guy who's running it now is enjoying it. He hired some other guys to do all the tech support, so that took care of the biggest headache. I doubt he's making much money, though.

Bypass the phone company if possible . . . (1)

mjprobst (95305) | more than 13 years ago | (#240442)

Sometimes disconnections and the like are due to local phone company suckage and can not be circumvented even if you have good technical skills at your ISP.

I worked with small ISPs trying to go head-on with the local phone companies in rural Wisconsin, and believe me, even though it's illegal for them to pull the kind of BS they did, they can get away with it.

THey'd do things like randomly disconnect all our dialup lines every few months, and take a few weeks to fix it; introduce bursts of noise on our dialup lines; and this on top of their incompetence.

If you have the money, knowledge, and guts to try, attempt to bypass dial-up lines. If you can supply broadband access to cable and DSL users, in addition to wireless, you might have a chance. But these are infrastructure-heavy items. Just don't assume that because the existing service has lots of disconnects that you can do anything about the dialup end of it.

Don't Get In Too Deep (2)

Animgif (96529) | more than 13 years ago | (#240444)

As the friend (MBA friend) of many Dot-Com Busts, I would just say to you: Don't get too big too fast.

You want to be big enough to fight that other company, but if you don't have to offer a service right from th start, DON' big enough to beat them, and then come out and show them CERTAINLY who's boss!!! You don't want to go down the same line as my friends, invest too much at the start, and then not be able to keep going.

Hmm (1)

niekze (96793) | more than 13 years ago | (#240445)

Besides the offering of DSL and other things people have suggested, you should probably offer quite a few services.

A local ISP here has been around since '93 if i remember correctly and they host and manage the websites for most of the radio stations here, as well as other local (Memphis,TN) businesses and such. Providing shell accounts would also be something that the 'big boy' ISP's don't provide.

You can't compete with the 'big boy' ISP's on their level. You have to provide things they don't offer. It's that simple.

Find a niche (1)

sommere (105088) | more than 13 years ago | (#240449)

The situation may be different down under, but here in the states I doubt there are many people looking for a new dial-up provider. I would think that you would need to either provide a high bandwidth connection (DSL, Cable, Wireless, Avian Carrier) or fill some sort of niche like being particularly linux friendly, or putting an emphasis on high availablility where you can assure your customers of 99% uptime etc...

Althea, [] a stable IMAP e-mail client -- how Evolution should have started.

Re:Best Advice (1)

RainbowSix (105550) | more than 13 years ago | (#240450)

Here is the link.

Big ISPs secret revealed! (1)

hklingon (109185) | more than 13 years ago | (#240452)

Having worked at one of the local providers here, I can tell you the secret to not going belly up is to sell incoming and outgoing bandwidth. Sprint and MCI know that, and thats one of the reasons its hard for ma and pa ISPs to make it. You have to sell your upstream to hosting people and your downstream to DSL/Cable/Dialup customers. You can't really do well hosting just one or the other. In fact, a lot of dedicated hosting people get their bandwidth from ISPs that have more downstream users than upstream hosting needs because those ISPs can afford to sell their upstream because they don't need it and they are almost making a profit selling connectivity. So you see, its a sort of symbiotic relationship... If you can ensure a good hosting market and a good dialup market, then you're much less likely to go belly-up. W

Re:Best Advice (2)

13013dobbs (113910) | more than 13 years ago | (#240454)

A few ISPs where I used to live, Indiana, had a policy of no phone tech support. Free support was given via either email or fax. When you signed up you had 1 or 2 calls for getting set-up, but after that, it was email and fax only. This kept the number of full time tech support people pretty low.

Re:Best Advice (2)

13013dobbs (113910) | more than 13 years ago | (#240455)

They did allow people to buy a subscription to tech support. If memory serves me right, it was for a month at a time. It was only $5, the difference between their price and the state average for accounts that got free tech support. People who wanted tech support could pay for it, but those who felt like they did not need tech support could get the cheaper rate.

Or Better Still... (3)

Patoski (121455) | more than 13 years ago | (#240457)

There are several companies to whom you can farm out your dial up service to. They even take care of all the tech support for you which is by far the biggest pain in the ass. You get charged about $10/per customer to use their phone lines and tech support droids. That way you only have to worry about a pipe for your servers and high speed bandwidth (DSL/Cable) start up costs [which can be substantial]. Technically you could run your whole operation off of one box (I used to know of a small shop that did so years ago) although I wouldn't recommend it. When it comes to your servers think redundancy, redundancy redundancy! It's going to be tough for the little guy just starting out but there are areas that are more rural areas that are under serviced or have no service at all by the big boys. This would be your best bet I think. Signing up companies for domain and web site hosting should be your cash cow. The dial up folks won't make you rich but companies you get signed up should help alot. Have fun!!!

the market *i* would go after to get funding... (1)

frknfrk (127417) | more than 13 years ago | (#240458)

is colleges and universities and libraries and schools. more to the point, state-owned ones which have to follow a certain procedure of taking bids on all projects. what you pitch them: wireless LANs in their schools/buildings. you install all the hardware and set up their main broadband connection (to a 3rd party supplier at first, then when you have the money to provide it yourself, connect to yourself). i think there is a big market for stuff like this. another market for setting up wireless LANs such as this is apartment complexes. anyway, good luck, but as a warning every 'mom and pop' isp eventually either stops growing or gets eaten (by the market or by a competitor).

By not starting one... (2)

kill -9 $$ (131324) | more than 13 years ago | (#240459)

But seriously, nobody makes money as an ISP unless you are one of the big ones. The industry is extremely competitive, and I wouldn't be surprised if the big boys are keeping prices so low so that the competition dies out, before jacking them up later so they aren't running at a loss.

Nowadays, dial is pretty much dying. You'd need to provide cable internet, which would probably mean that you need a cable company first. The other alternative is DSL, of course, but then your customers need to get DSL lines from the local telco, and you need to hook your network into the telco infrastructure as well. Since most telco's (at least my experience) run ISP's over their DSL lines as well, you'll probably find it hard to compete for price against them as well.

Okay, so on to what you would need. Customer management, hardware to run your services (e-mail, news, authentication, etc.) off of, lease some POP's (point of presence) since I'm assuming you aren't a telco either, and don't forget contracting out a vendor for customer support (unless you want to do it yourself). There's more, but I'm not going to do all your work for you, I'm just trying to make a point.

It's a tough industry. You'd almost be better off starting a company and reselling local and long distance services first (CLEC) then going off and creating a ISP off of that and hope to win the competetive ISP battle.

Sorry to rain on your parade...

ISP (1)

austinij (139193) | more than 13 years ago | (#240462)

Having stated and run an ISP back in 1998, I have a few things that I'd like to point out to anyone interested in starting thier own:

First off, it's very expensive. Depending on whom you decide to use for equipment, don't expect to spend any less than 25,000 solely for dial-in equipment. Don't forget that you can buy more equiment as you grow, so don't go too overboard with startup.

Second, you will NOT survive on providing dial-up alone. When we were up running at full capacity, we were actually losing $1 per port when charging 19.95 / mo. Make sure you have some income from web development / hosting as well, or you will have a hard time making it.

consider having support from the community. Investigate a co-op or other solution where the community has a larger stake in the success of the company instead of trying to just be anohter business out there.

PRI lines, T1 (or better) line, etc are very very expensive. Investigate options for bandwith. Check to see if you can find a DSL provider that will let you re-sell thier dsl links as multiple-user dial in links. The $300+ a month you spend doing that for a DSL link with 1.55 Mbps is far cheaper than a 1.55 Mbps T1 that will cost you 1200 / mo for the line and then 350 local loop charges.

Unfortuantely you are basically stuck paying whatever the local telco wants you to pay for PRI's or channelized T1 service.

Another good rule of thumb is "10% of your users will utilitize 90% of your resources". This a far more true than anyone would like to beleive. We had users that would be logged into the system 24/7/365 and we couldn't charge them a dime over the $19.95 since we were advertising "unlimited hours".

Make sure people pay you. Get a good collection agency and don't let people go too long without paying. It will just kill you faster than anything.

Stay away from leases if at all possible!

Things you should be familiar with: Linux
-- How to configure and optimize your kernel
-- How to setup mail, dns, reverse dns, www, news, virtual servers, virtual email, ftp accounts, suspending/deleting users, radius, postgres, mysql
-- Reading logs
-- Maintinence

-- C/C++ experience. Writing little programs for customers or yourself can make/save a TON of money.
-- cgi languages (c, c++, perl, php, etc) Small web scripts for your customers can be sold for a lot of money.
-- HTML, DHTML, other web languages

Feel free to mail me if any of you are intrested in prusuing this. I've got a lot more to say that I'm will to write here, and if you have specific questions, I'd be more than happy to address them.

-- Ian

yea... (1)

HappyDrgn (142428) | more than 13 years ago | (#240465)

I would have loved to start an ISP in Australia. Unfortunatly I do not have the money to go into such a venture. I have priced a Webhosting company here in the states and it is very cheap, however I am not quite sure on the return value. I have worked for quite a few startup ISPs in my lifetime and they seem to start out with very little money. Usually just enough money to get it going the first month with other jobs to pay for it while it is starting up. I have seen one start to turn up some profit in the first two months. BTW: looking for employees yet? :)

Not Gonna Happen (1)

derrickh (157646) | more than 13 years ago | (#240466)

In 2-3 years, small ISP's will be dead. It'll follow the same path that automakers. When cars first became popular, there were dozens of auto manufacturers, now there are only a handful of major players in each country. The same is happening to ISPs.

Mad Scientists with too much time on thier hands

Sorta Like Nscar Now (1)

WillRobinson (159226) | more than 13 years ago | (#240469)

Well, the rummor is, if you have ALOT of money you can make a little.

Hmm... (1)

broody (171983) | more than 13 years ago | (#240480)

Perhaps this "Ask Slashdot" question has been stuck in the queue since 1991? The small ISP biz is dead, in case you haven't been reading the papers.

I've done it, and it wasn't very pretty. (3)

mikehoskins (177074) | more than 13 years ago | (#240483)

I had major problems with the equipment, users, telco, and software. I'd steer clear, IMHO. I lost major bucks on the deal, and I'm no newbie. You need to have major cash flow, have great business sense (far more important than your technical skills), need to really run it like a business, have an awesome accountant, market, have great customer service, oh and have at least semi-good tech skills.

My point is that being an ISP is a BUSINESS, not a tech job. Trained monkeys can (almost) do the tech work, especially now that things are SOOOO easy. Hopefully, you can get funding and business people on board to run it. Business concerns are primary, tech concerns are either secondary (or even tertiary). And, hopefully your local telco or other local ISP's aren't better at running an ISP business than you are, or they'll kill you off....

Nope, as one who has lost major money, it isn't worth it....

ISPs are successful when they do more... (1)

sapphire42 (178537) | more than 13 years ago | (#240484)

Small ISPs must do more than internet service to survive. Depending on the market, the business is in a one-stop shop, some place businesses can go for EVERYTHING, networking, computers, web design, internet service, everything. With this business model, you are more likely to succeed. The money is in the business market, but if you can't provide broadband to your business customers, then you won't have many. There are smaller business that still use dial-up, (especially in small town markets). Cable doesn't really count here, since it's not really desirable for most business use. At the very least, you have to do ISDN, which would involve having all or some of your modem pool be ISDN primes. Unfortunately, with this same business model, you must have the people who can DO all of these things, and people to support them. Tech support is always the worst ongoing problem.

Is the ISP the problem or the phonelines? (1)

codeguy007 (179016) | more than 13 years ago | (#240486)

Before you look astsetting up a country ISP you must look at the quality of the phone system. Disconnection problems may not be the ISP fault but the fact that the phoneline are still using old equipment.

I know a guy who lives in the country in the states and they have connection/bandwidth problems but the problems for the most part are all phone company related. The phone company instead of replacing the rotary phone equipment with touchtone equipment just added equipment to the central office that makes the touchtone work over the rotary system. Make pretty much any big downloads impossible.

Also in the country you have to worry more about electrical interfence and surges along the phonelines.


My advice is, don't bother (1)

automatic_jack (181074) | more than 13 years ago | (#240489)

I predict that dialup internet access will be nonexistant within the next 5 to 10 years. More and more non-techies are getting high-speed access because it is affordable and basically makes the internet significantly more useful than it is with a modem. The cost for this type of access is falling steadily and availability is increasing.

DSL will likely not survive either, unless the limitations on distance from the CO, and general issues with the physics of forcing a lot of data down a piece of copper. If it does live on as a viable access method, it will only be with the RBOCs (ie Verizon, Pac Bell, etc etc).

So what I'm saying is that in my opinion, starting your own business as an internet access provider is probably not going to lead you to success. High speed access is the future, and it's not the kind of thing that your average entrepreneur can break into.

Re:isp... (1)

yogensha (181588) | more than 13 years ago | (#240490)

I'm in a similar situation. Australia has lots of rural areas, I'm sure. Are you looking at providing service in a rural market? I work for the largest ISP in this area, and we're not that big at all. 5 employees. The telco situation here prevents us from even providing ISDN, and DSL is completely out of the question. We have recently deployed a wireless network, and we're doing quite well. People are banging the door down for broadband :)

Above all though, to be successful, you need the best customer service. People are tired of major companies' crappy access and lack of good customer support. The company I work for is founded on good customer service. Our customers pay for it and expect it.

Abstainer: a weak person who yields to the temptation of denying himself a pleasure.

one word (1)

superdk (184900) | more than 13 years ago | (#240491)


disconnects are most likely just phone line issues (but that's been talked about already)
the way things are today resale is the way to go. rather than you buying up data pipes, servers, dialup boxes, etc... you can get it wholesale from someone else and make a profit! companies have been doing this in the states for phone service for a while now. the company i work for now (T1 provider in the SE US) got started by reselling BellSouth local phone service cheaper than BellSouth sold directly to customers. over time we got big enough to have our own facilities (phone switches, routers, DACS, etc) and now we just lease unbundled loops from Bell.

resale is more a business venture than a tech venture, it's at least somthing to think about tho.

Jesus Christ answer the damn phone! (1)

AintTooProudToBeg (187954) | more than 13 years ago | (#240492)

I'm on hold now with MegaPath to troubleshoot some connection problems... I've been on hold for more than an hour. Thank god for speakerphone.

OSS = Operational Support System (1)

AnyLoveIsGoodLove (194208) | more than 13 years ago | (#240494)

I've designed and built ISPs, ASPs, and IDCs. The common problem is a lack of an integrated OSS(Operational Support System.) I define OSS as:

Billing and Subcriber Management

Customer Relationship Managment (CRM)

Provisioining (may not apply for simple dial up)

Network Element Management.

You must examine, after the business plan, what software will fit into the above puzzle. I saw a 42 million dollar ASP go under because they could not automate the OSS. Adding new clients, setting up the billing, taking care of their problems all these were manual steps and cost them business. People cost more than software. These components must be addressed in your business plan, even if you only plan to use quick books and a telephone.

Another area: Business Process. How do you sign up new customers, how do you handle do you....I think you get my idea. Do the BP then design the OSS.

Good Luck steve

What you really need... (1)

SomeoneGotMyNick (200685) | more than 13 years ago | (#240502)

1. A time machine to get you back to 1995/6 and
2. Inside connection with a major phone company or cable company so you can sell your customers over to them for a profit before they steal them

I've been there, done that... Also, if you find venture capital, make sure they DON'T use AOL and they know what the Internet is. My bankroll was completely clueless when they paid my way to developing an ISP in '96 and pulled out 9 months later after not realizing (despite many explanations) what the Internet is good for and why anybody would use it.

Love not Money (2)

milo_Gwalthny (203233) | more than 13 years ago | (#240505)

If you are starting an ISP, make sure it's for love not money. The ISP business is a pretty bad economic model (at least as it's configured in the US, I do not know how they charge or what things cost in Australia.) Unless you are big enough to have ancillary revenue streams (ie. co-marketing deals, selling your users' privacy to direct marketers, etc.) it is tough to generate cash.

The costs can be broken down in a few categories: - equipment (modems, authentication and proxy server, ups, etc.)
- telecomm (telephone lines in, T1 out)
- upstream ISP costs (the T1 has to go somewhere)
- marketing (you're pressing millions of CDs right now, aren't you?)
- labor.

For a large ISP, the non-marketing costs are typically about $10/month per user and the amortized marketing costs are about $11-$15/month per user. Revenue is usually about $20/month per user.

The largest non-marketing cost (on a monthly basis) is the telephone lines in. In the US a line in is about $20/month (depends on locale of course). One of the advantages of scale is that you can more accurately predict your likely usage. Assume, if you are not big, that your peak usage is 50%, so you need one line (and modem) for every two subscribers. This will probably still get you less than raves from your customers because the probability of not getting a dial tone is high (big ISPs shoot for a p95 or higher.)

Marketing costs have been high in the industry because most ISP subscribers do not stay long at any one provider. So, after spending $100 or so to sign one up, the subscriber stays 7-12 months on average (plus, add in a free month of service to the "marketing" cost.)

Hopefully knowing this you can avoid some of these problems. Good luck.

Wireless? (3)

yasth (203461) | more than 13 years ago | (#240506)

Hmm a limited (downtown only???) wireless ISP would rock, and would probably be your best bet for leapfroging the established players, as even in Cable/DSL there are some very large players, but wireless is still untapped(for the most part)

Inderect ISP (1)

bitva (206067) | more than 13 years ago | (#240508)

I work for an ISP. kinda.

I say kinda, cuz we don't actually provide our customers with the dial up. We buy accounts from a 2nd party provider (who get there's from the big boys, i.e. megapop/uunet) for $8 and we sell them to our customers for $19.95. We host e-mail, webpages and whatnot all in house. If our provider didn't suck too much we'd have alot more customers.

starting an ISP (1)

isotope23 (210590) | more than 13 years ago | (#240511)

if startup capital is limited, I would say you look into re-selling the higher end service (DSL, dedicated circuits etc) from the local telco. I'm not sure about the climate in Australia, but becoming an agent here (USA) can be worthwhile. If you are in a higher density area, look into cutting deals with local apartment complexes as well......

Services, support, smiles (3)

HadronPie (212138) | more than 13 years ago | (#240512)

My suggestions (as a user of multiple ISPs) would be to offer services such as:
  • shell-only accounts
  • static IPs
  • metered toll-free access
  • "free" email accounts
  • maybe email virus scanning at the server

Charge a nominal monthly rate for the first three. Lump the other two into your monthly cost. Of course you must have automated credit card billing.

Offer 24/7 toll-free tech support. Keep the call center well-staffed and don't punish/reward the support staff based on how long it takes to complete a call. Integrate the web and email support services. Setup a support evaluation survey that gives people points towards freebies if they complete the survey. Track this info like all hell. That costs a lot, obviously, but it'll be a very good selling point.

Your advantage over the Big Guys will come from offering services they don't offer at comparable rates with friendly, effective technical support. There's not much else to an ISP.

Oh yeah, game servers, irc servers, news servers.

Advertising (1)

wmulvihillDxR (212915) | more than 13 years ago | (#240513)

Also consider the adverts you are going to run. Are you serious enough to get local TV ads or will word of mouth suffice? If the area is small enough and you only want to provide service to that area (i.e., you DON'T want your business to grow and spread out), then word of mouth and perhaps some radio ads might do the trick. Advertising IS important!

Ritual Suicide (2)

BigumD (219816) | more than 13 years ago | (#240514)

I'd think that starting a small ISP nowadays would be likened to committing seppuku, but if you're still interested, you should try to build a loyal customer base that will be valuable when the big fish come to buy you out.

Here's an Idea (1)

AlanOfDale (226375) | more than 13 years ago | (#240518)

At work we have an ISP that has run fiber into the building and sells the different company's access based on bandwidth. We currently have a full 3 meg pipe for less than 1k a month. they even offer pipes up to 100 meg. Something to look into.

Re:A Time Machine (1)

Courageous (228506) | more than 13 years ago | (#240520)

This is true for the municipal areas, but you can
still do quite well in many rural areas; as they
develop, you might even be lucky enough to get
bought out.


Offer something the other ISP's don't (2)

SCHecklerX (229973) | more than 13 years ago | (#240521)

Wireless has gotten pretty inexpensive in the last few months.

Get your main broadband taken care of, get an antennae on a radio tower or three, and offer wireless internet to your community.

I can't think of why this wouldn't sell, especially if you live in a college town. Offer the service to 'internet cafes', and give them an address block. It should sell decently enough to pay off.

You can't not afford quality support (2)

Bonker (243350) | more than 13 years ago | (#240523)

I currently work as a networking professional at a growing financial institution, but before I worked at an ISP in texas. I spent quite a while in the support room.

Like any support department, it was fairly dead-end. You either learned-out or burned out. Despite this fact, life was fairly problematic in our particular department.

We had a saying that we were the red-headed bastard children of the organization. This was because we were at the bottom of the barrell. We always got the hand-me-down PC's, poorest, least usable office furniture, and what 'comfort' equipment such as microwave ovens, coffee machines and such from the other office that was broken, and could be 'written off' before we jury-rigged it back into operation.

We made less than the receptionist and the phone-billing jockies despite the fact that we could do their jobs but there was no way in hell they could do ours. We frequently did odd-job coding and repair work for the entire company, yet the head bean-counter repeated suggested eliminating our department and out-sourcing support because we generated no revenue. Our meager wages were a black hole of finance that made the company's bottom line look bad.

What the accountant didn't realize and what the company apparently still doesn't realize can be found with a simple 'like' query on the support-tracking database. Why do most customers sign up for our ISP service? We have superior support. Why do most customers quit our service for another ISP? They felt like they got poor tech support.

What you discover working in tech support for an ISP, is that you are the only real difference between your ISP and others. What our manager knew and what we knew was that there was a correspondance between customer churn-rate and how happy the support staff was. The week that our gaming privaleges were revoked, we lost more customers than the week we got them back. Of course our personal problems weren't supposed to carry over ot the phones, but mood does indeed matter. If we got more ram or newer processors, and could open unfamiliar applications more quickly, our customers felt like they were getting faster, better treatment.

One of our most successful techs was the guy who regularly brought his own cherried-out PC to work to play games. He did all his support work on his own box, and was able to do it quicker, better, and usually made the customer happier than when the rest of us tried to do the same thing on our hand-me-downs.

The bottom line is that you can't afford not to have a quality support department, and that means keeping your support staff happy. That doesn't necessarily mean allowing gaming at work, but it does mean new machines, comfortable office furniture and nice accoutrements such as a refigerator, coffee-bar, and a kitchen of some sort. Don't spoil your support staff, but they're just like the transmission in your car. Sure, it's the engine that does all of the work, but you'll be sorry when your gearbox goes out. Treat it well, and it will treat you well.

Tough market... (2)

RareHeintz (244414) | more than 13 years ago | (#240524)

I think that to have any hope of success, a small ISP is going to have to provide something more than a pipe and phone support. It's entirely likely that you will be unable to compete on price alone, and will have to provide something more to your users, such as providing high-quality access where there is no high-quality Internet connection (due to distance from dialup centers, poor phone line quality, lack of broadband), or provide something more than just the 'net.

AOL (for all its truly bogus deficiencies) is a fine example - besides web, mail, and Usenet access, they provide an enclosed, relatively easy-to-use interface, built-in content filtering, and a host of other services that your average family users would want. For this, they get to charge quite a premium (something like US$22 - don't know what it would be in Oz).

Attempting to compete in AOL's space would be foolhardy, but you could follow their example and pick some underserved segment of the population and give them the features they want. One idea: serve up a geek-friendly service. The Internet has been dumbed down so much that those who would like things like a full NNTP feed or shell access have trouble finding it with the right combination of reliability and price.

I say, look at what the Internet isn't doing well right now, pick a niche you're competent to serve, and hope for the best.

- B

Start up an ISP? (1)

sacremon (244448) | more than 13 years ago | (#240525)

Reminds me of the definition of a strip club in the glossary from "something you do not want to own."

It would seem quite simple! (1)

samrolken (246301) | more than 13 years ago | (#240527)

Don't tie your service to proprietary software, to a particular OS, run stable servers, and be really friendly to everyone. And webspace... we all love webspace. And don't block out the POP3 port (110) so that we have to use -your- mail servers. And don't be like anyone that sucks.

From whats been happing..... (1)

SGDarkKnight (253157) | more than 13 years ago | (#240533)

where i live, all the local internet companies are struggling to stay alive. With the high speed internet being offered by DSL and CABLE, the only reason the little guys have held on was because they had been around for a while and built up a fairly large customer group based on their dial in access. Now with the big compaines moving in to sell the high speed, the only thing the little guys can do is re-sell the big companies services. And it just dosn't seem to be working out right now. The one thing that the little guys are starting to look into is the wireless technology. That seems to be their only way out of this situation. But they still dont know how its going to turn out. Ah well... i guess what im trying to say is don't bother with it.

disconnections (1)

gabvalois (256651) | more than 13 years ago | (#240535)

I think the disconnections problems are due to the bad quality of phones lines and that you might also have them...

Re:Best Advice (1)

shannara256 (262093) | more than 13 years ago | (#240536)

That's not true. My ISP is Expert Net (, and they have the same policy. I had problems a few times, and I was able to use Juno to get support. Now, if I had problems, I could also use my connection at school.

I think that no phone tech support is worth -$7/month (or, to rearrange the negatives, I don't think that phone tech support is worth $7/month).


Re:A Time Machine (2)

markmoss (301064) | more than 13 years ago | (#240542)

That's true for the states (except possibly very rural areas), but what is the situation in Australia?

Re:Wireless? (2)

cavemanf16 (303184) | more than 13 years ago | (#240544)

I thought wireless is limited by distance availability? For a rural area, especially the untamed outback like Australia, you would have difficulty reaching most of the customer base. Maybe if you want to bounce around from house to house on some sort of yet unheard of P2P wireless connection, but I doubt that would work out too well. I'm not an expert on the whole 'How To Start an ISP', but my guess would be that Wireless is not the way to go for a rural area.

Re:Two Important Words: Think First! (2)

cavemanf16 (303184) | more than 13 years ago | (#240545)

While I do think you need a good business plan to start up something big, this guy can start small. In fact, if he knows many people in that rural town he can grab a few friends to help get it started and test things for him. Educational for all, and maybe they'll become partners in the Next Big Thing! After all, it takes someone with balls of steel and a love for risk to be an entrepenaur. He's certainly not going to do it if he tries to think through every last possibility. That's part of the excitement of starting a new business.

Most import feature (1)

MSBob (307239) | more than 13 years ago | (#240546)

Uncensored usenet.

I don't need to explain to you why, do I?

Re:The myth of the failing mom & pop ISP (1)

EastCoastSurfer (310758) | more than 13 years ago | (#240547)

Most people out there are happy with dial-up and aren't interested in the prohibitative prices of broadband.

I don't think it is broadband pricing that is keeping people away, but availability. In my area you can get broadband for about the price of dialup and a second phone line.(around $40USD/month)

In other news. . . (1)

Tsar cr0bar (310803) | more than 13 years ago | (#240548)

I saw this on "Ask NASA" today:

"Hi, a couple of my friends and I want to start a space program. None of us have ever really worked on space exploration, but we like really like Star Trek and the first few spinoff shows. We were hoping that maybe some people from the NASA community could help us out with some tips. . .what kinds of fuels and rockets should I use with my space program? Is there a GPS service that works in orbit as well? What were some snags you ran into when starting your space program? There are obvious things like astronauts, space suits, mission control centers, and flight computers, but we'd like to get a feel for how hard it might be to patch something together with open source alternatives. Also things like programming flight trajectories might be useful. I figured we might think about it ourselves for a few minutes and realize that if we have to ask these types of questions and don't know how to research them ourselves then we really shouldn't be getting into this business, but gosh darn it, we were sitting around drinking beer, and figure that it would be really cool!

Isn't there already a HOWTO on this?

Are you sure? (1)

Ubi_NL (313657) | more than 13 years ago | (#240550)

Considering australia, where there is hardly any cable, all you really can provide is dial-in services (maybe DSL?)

I guess what you really need first is lots of money. All the major players now are huge companies that can afford expensive hardware, helpdesk etc etc. You won't be able to stir the pond unless you start off at a similar level as your competitors.

And then you should hope it won't end like the australian airlines. Here the government introduced a third airline (next to anzett and Quantas) to increase competition. All that happened was the release of a price war, the 'new' company went bankrupt a few time, and everything went back to 'normal'.
To avoid such a scenario, you realy need to point out to your customers you have something to offer. Don't try to be cheaper because you will most likely lose out

The biggest question is: (1)

CrackElf (318113) | more than 13 years ago | (#240552)

What are you offering that the competition is not? Who is your target market? What will make them choose you instead of a big ol isp? (for instance, in my hometown, someone set up a very successful mom and pop that offered shell accounts and targeted unix geeks and small businesses who wanted a unix web site)

You got to be joking... (1)

KingAzzy (320268) | more than 13 years ago | (#240553)

...ISP's are the most competitive business there is, and these days its even worse. You are going to have to go up against the biggies -- all the small mom-and-pop ISP's have pretty much threw in the towel.

Enjoy your bankruptcy.

Offer something they don't (1)

Chakat (320875) | more than 13 years ago | (#240555)

It's simple capitalism. Offer something the other guy can't. The ISP market is pretty much a commodity, where if you've dialed one, you've dialed them all. So, offer something they can't like a cheaper price, or on-site tech support (probably for the masochistic only), or perhaps what could be the coolest for a rural ISP, fixed wireless. You aren't going to make it via advertising fewer disconnects - rural phone lines would probably be improved if they used tin cans and a string. But you do need to set youself apart and get ready for 6-12 very tough months getting started; everybody loses money for the first .5-1 year.

If you hav he the startup money.. (1)

ColbyR (323052) | more than 13 years ago | (#240557)

Consider this.. Provide Broadband access to multi home's such as apartments this can be done by running circuits to the location and placing your head end equipment at the location so.. if you wanted to provide DSL to a apartment community you would run out your T-1 or what ever to the community place something like a Lucent MAXDSL with two 16 port blades to start, a Xedia AP 450 (because it rocks at QOS) and a Cisco Cat 2924 to connect it all then you just need to punch down the extra pairs of utp going to the homes and boom you are providing DSL service.. You can do the same trick with cable service.. replace the DSLAM with a Nortel CMTS 5k and split off all the cable going to the apartments you will end up running in the 50-60db area.. If you REALLY want to get trick place a Nortel Shasta 5000 at your POP's to provider services like personal firewall etc.. you can also provide Wireless access if you want to.. Adaptive Broadband has about a five mile range for point to point microwave and its not very costly.. you can tie that in with cisco aeronet units to the homes these have (depending on objects in the path) a range of a few houndred yards. And dont forget to provide everything you want to be the 'one stop shop' Provide PC repair consulting shell accounts web hosting games etc.. Shasta 5k = ~$100k US Lucent Xedia AP 450 = ~$10k US Nortel CMTS 5k = ~$15k US Cisco Cat 2924 = ~$1500 US Lucent MAXDSL = ~$15k US Private Line = ~$1600/m US Look on backers face when you go belly up =Priceless If you do it right this CAN make money but if you do it wrong you will end up with a $4million US burn every MONTH. This would put you in the big time.. Dialup service costs to much. and for it to be worth anything you need to keep a 4/1 customer/modem ratio... Best of luck - DS

Re:Most import feature (1)

Tech187 (416303) | more than 13 years ago | (#240559)

I don't think so.

If you over promote the Usenet feed, you'll end up with some fat guy living in a single-wide** who will set up Pluckit and use up 70% of your total bandwidth downloading binary girlie pix.

(**his momma has a double-wide, which he helps make the payments on, in months when he's working)

Re:You got to be joking... (1)

Tech187 (416303) | more than 13 years ago | (#240560)

That, and they've got a free pork chop dubber on the first Tuesday of every month, for customers who have their bill paid by then. Right?

Re:Best Advice (1)

Tech187 (416303) | more than 13 years ago | (#240561)

Of course, by providing only e-mail (and fax???) tech support, you insure that you'll never hear from customers who can't keep a connection going to send/receive email.

Re:You got to be joking... (1)

Tech187 (416303) | more than 13 years ago | (#240562)

typo: dubber=dinner

Re:Two Words... (1)

Tech187 (416303) | more than 13 years ago | (#240563)

as well as a 10mb website,

What is anybody going to do with a 10 milli-byte website?

Re:Advertising (1)

Tech187 (416303) | more than 13 years ago | (#240564)

Some photocopied fliers, stapleguns, and a 14 year old kid or two to distribute them.

A Time Machine (4)

Tech187 (416303) | more than 13 years ago | (#240566)

To start a successful ISP you'll need a time machine that can transport you back 4-6 years. And going six years back might not even be enough. The biz is locked up now and the consolidation is in process. It's completely the wrong time to try to start one up. Unless you've got a source for cheap wholesale bandwidth and are way, way out in the hinterland somewhere that AOL, MSN, and Juno don't have a local number.

TECHs (1)

kgbFXzero (442035) | more than 13 years ago | (#240567)

being a tech support lackey myself i know the importance of having skilled people on the phones. so you'll wana stay away from MCSEs when hiring support staff

Re:Best Advice (1)

haruharaharu (443975) | more than 13 years ago | (#240569)

I remember those guys. I shudder to contemplate reporting a fault in their equipment.

Can anyone say....Haiku? (1)

cobol4me (444373) | more than 13 years ago | (#240570)

Like the Borg;
Gobbling this and that;
Start-up ISPs beware

not worth it.... (1)

TekFreak (449286) | more than 13 years ago | (#240572)

I use to work for a local phone company who was also an ISP. I saw the price list for the equip they had and knew how much a month they were getting from each customer. It is almost charity....

Just don't do it. (1)

jim999 (450089) | more than 13 years ago | (#240574)

Let me save you lots of trouble and money.
Don't do it. I had an ISP from 95-97, when we finally went under big time. I have been assembling my horror stories in hopes of writing a book about the whole miserable experience. But I will probably get sued for that as well. (like everything else.)
If you insist on doing it make sure you have the following:
Multiply all your cost estimates by 1000, because no matter what you think, you are wrong.
A billing system is not a luxury
Don't assume anything about the amount of customers you are going to get. In fact, divide your estimate by 1000.
Have at least one year of cash in the bank to asborb the costs.
Don't rent any office space until you show a profit.
Forget about your life. It is now over. Every moment of every day will be absorbed with questions like "Can I run an IRC server on your unix box." Or "I put your floppy in that you sent me and now my monitor doesn't work." (She didn't have the monitor turned on.)
Be prepared for the lawyer "cease" letters because one of your users is posting something they shouldn't
You won't be able to sell if after a couple of years, so take that out of your business plan now.
You probably won't be able to sell it, EVER!
You will *Never* be cheaper, better, or faster
Advertising costs will kill you.
Those sportster modems are a REALLY bad idea.
Every one of your users wants something for nothing.
Don't borrow from your family to get the project started. You will never be able to pay them back. And you will just look like a fool for the rest of your life. I could go on but you get the idea. Just don't do it. Don't even think about it. Just forget about it and be glad this message stopped you in time!
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