Days of Tumult over for Canadian ISP sector

Only a few years ago, the Canadian Internet service provisioning market was a cauldron of cacophonous mud-slinging and bad blood, with lines clearly drawn between the small, upstart ISPs and the old guard made up of bigger, more established players such as Bell Canada and

its Sympatico arm. It seemed as if a week never went by without John Nemanic issuing some sort of blustering attack on the big boys.

Nemanic was, until November 1999, president of I.D. Internet Direct, the largest independent ISP in Canada until it amalgamated with a privately held company to form Look Communications. Being the biggest fish in a small pond, Nemanic essentially led what was then viewed by many as a noble, important and critical crusade against the established players to ensure that the independents had a voice and a fighting chance to get a slice of the provisioning pie.

But times were different only two or three years ago, when there was a business in getting companies and households hooked up to the Internet for the first time. The ISP business model was still and inchoate one, and today’s monolithic and well-know offerings from the likes of Bell and Telus had not been fully worked out. There was room for the small guy.

Today, those business models, and other aspects of the ISP industry, have evolved to the point where small ISPs have had to abandon their crusade to gain an equal footing with their bigger rivals. Today, the most successful small guys are the ones that can appeal to a niche market, such as a particular linguistic community with a desire to deal with a company that speaks its mother tongue.

Another measure for small-guy success is the ability to curry the favour of the large ISPs, a fact revealed in a recent study from NBI/Michael Sone Associates. Because many successful independents have maxed out their growth potential, the time is now ripe for some of them to pawn off their burgeoning little enterprises to a bigger player eager to get hold of what has been built up.

This situation is a far cry from the Days of Tumult of only a couple of years ago. While those days were more lively and interesting, they were also more favourable for customers. There was more choice of provisioners and more competition. As the small players merge with, or get bought out by, the bigger players, the direction of Internet provisioning and the other services now being offered by ISPs (such as consulting) will be dictated by fewer and fewer providers.

The results of that circumstance could have customers hankering for a return to the fierce competition and greater choice that defined the good old Days of Tumult.

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Jim Love, Chief Content Officer, IT World Canada

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