How can an itty-bitty small-town Internet service provider survive the stomping advance of America Online?
Simple. By pooling its resources with hundreds of other itty-bitty ISPs.
That's what US Online Network is pitching. The tiny Wenatchee, Washington, company is trying to set up a federation of ISPs where the participants share technical support, marketing costs, and the expense of running an up-to-date portal.
By sharing the back-office costs, a small ISP would have a better shot of going up against AOL, said Steve Klock, managing director of US Online Network.
"The national guys have their niche, but local service is sustainable," Klock said. "If you can get enough local guys together, you can develop the national-level services."
Member ISPs will be able to purchase network services and equipment at a discount and share specific marketing plans, Klock said. In return, the member ISPs agree to stick to one local area, so that the members don't compete with each other. But unlike the franchise model, the mom-and-pop ISPs get to keep their brand and local cachet.
Klock launched the company in July with about US$100,000 in start-up capital. So far, he said, US Online has 55 members, and it's signing up three to five new members a week. The company plans to make money by advertising on the shared portal and by charging $100 a month for each territory.
To be sure, US Online Network has a big hill to climb. AOL alone has thousands of dialup numbers around the world and can handle 1 million simultaneous users.
Still, Klock said the appeal of local ISPs, and the antipathy toward a giant like AOL, can work to his company's favor.
"We bring the best of both worlds," Klock said. "We bring the national credibility, the national level of service, and the local support and service."
