by Al Massey
(We are still guessing at this point.)”
Each month I hear from more of you that want faster and bigger data pipelines to the Internet. I really don’t know what most of you would do with them, but it is clear that you want them any way. I have had some correspondence and conversation with friends at a number of telcos this past month and they are trying to assure us they want the same thing. I am not so sure.
It became clear to me back when we were debating the Telecommunications Act that, for the most part, the telcos are mired in a bureaucratic muck left over from their regulated monopoly state. They just can’t seem to shed a certain mindset and move into the digital age fast enough for most of us.
ADSL seems to be the catch-word this month and while I agree it holds a promise of super-fast connections I wouldn’t hold my breath waiting for it to appear on the market. According to Bruce Leichtman analyst for the Yankee Group there will only be about 25,000 paying ADSL customers by the end of this year vs over 500,000 cable modem subscribers.
There are a lot of reasons for this but the number one deciding reason is MONEY. The telcos are making money, big money, selling T-1 access for big bucks to American industry so why would they want to sell ADSL for under $50 per month.
Another reason is their rush to merge. You need a scorecard to keep up with who’s in bed with whom these days. GTE, Bell Atlantic, WorldCom, MCI, AT&T, and British Telecom are all way too busy playing the merger game to pay attention to bringing ADSL to the masses. These deals are gigantic and require a lot of resources as well as money so it will be years before we can expect anything meaningful in the way of better service from them. They are just simply to busy figuring out how to fleece the shareholders and can’t be bothered with providing faster service at affordable prices right now.
What they say versus what they mean... “Close project coordination. (We sat down and had coffee together.)”
Internet watchers and regulators are keeping a close eye on Europe to gauge trends in Internet use. Demand for Internet access is on the rise throughout Europe, as businesses expand their use of the Web for eCommerce and consumers move on-line in greater numbers. According to a recent Report from Forrester’s European research center, overall access spending in Europe is expected to climb from $2.5 billion in 1998 to $11.8 billion in 2001.
In contrast to the American market, the Internet in Europe is being driven by, business access, not consumer access. As larger firms pull their partners on-line and fend off incursions from global competitors, there will be a surge in demand for new connections and more bandwidth.
“Today’s Internet access landscape is populated by a limited number of providers offering undifferentiated products and services,” said Joe Sawyer, analyst in Forrester’s European New Media Strategies service. “As businesses and consumers move onto the Internet in greater numbers, the on-line population will fragment into several distinct groups. To succeed, access providers must develop an understanding of these groups and devise clear strategies that meet their particular needs.”
What they say versus what they mean... “An extensive report is being prepared on a fresh approach. (We just hired three punk kids out of school.)”
Surveys, I like surveys, they can prove or disprove anything. Some facts from recent surveys taken at random:
In 1997, 17% of all stock traded was done online. In `98, the figure has increased to 30%. Accordingly, Charles Schwab reports $26 billion in online trading the first quarter of `98 and 50% of all its trading is completed online. In addition, E-Trade, Ameritrade and DLJ show considerable quarter- to-quarter growth. As consumers become more comfortable trading online, expect to see an increase in purchasing of other financial services like mortgages, car loans, and insurance online.
Because the Internet allows us all to research different products and prices, purchasing financial services has become a price-driven commodity. Since most sites offer only product information and pricing, it is difficult to demonstrate any added-on value when purchasing online.
Most transactions completed on the Internet eliminate the middle man or “distribution channel. “While these middle men add value to the product or service, their compensation is reflected in bottom line costs. Since the Internet model is strictly price-driven, Web sites offer products at the best possible cost to consumers. As e-commerce grows in popularity, companies will have to reevaluate the roles of their “distribution channels.”
Seniors represent 15% to 20% of Internet users. Their usage indexes at 117 to 150 compared to the normal Internet. Forty percent have purchased online whereas only 37% of normal users have done so. Their primary use of the Internet is e-mail, financial services and healthcare.
Web sites are attempting to become the solution to rising customer service costs and decreasing customer satisfaction. As many companies’ customer service costs increase, customers continue to claim they are dissatisfied with the quality of service they receive. Corporations are turning to the Internet as a way to remedy this concern. Customers can take care of problems or find answers themselves by accessing their accounts directly from the company’s Web site. Some companies are offering larger customers “mini-sites” to handle their own customer servicing issues.
Technology will allow consumers to input a timeline of potential life needs such as mortgage refinancing, home equity loans, or college tuition. As one of these events draws near, information pertaining to this need is automatically forwarded to the consumer.
Companies that utilize the interactive services offered on the Internet, often make the mistake of conducting offline research for these online services. The results do not translate accurately. To research an online service, research must be conducted online!
As more corporations create virtual offices for their sales personnel, portions of the corporate Web site are becoming password protected for exclusive use by the sales team. Sales reps can access customer information; download software, forms, and marketing materials; and have online sales meeting directly from these protected sections.
Each time Internet users revisit a site, they generally share more information about themselves or their company. They expect the site to process this information to provide them with customized materials that will target their specific needs each time they log on.
What they say versus what they mean… “ Major technological breakthrough! (It works OK; but looks very hi-tech!)”.
To the consternation of regulators everywhere Internet gaming has gone mainstream. A company licensed in the Dominican Republic, has become the first Internet gaming operation to issue VISA and MasterCard debit cards.
Gamblers may establish an account by applying for a card on the company’s Web sites or by phone, and if approved, must deposit a minimum of $1,250 to back that debit card. Winnings will be deposited in the account. Players may not spend beyond the limits of their debit card deposits and their winnings.
“By offering VISA and MasterCard service, we are guaranteeing the protection of the player’s funds,” said Joseph Gallagher, a Philadelphia-based online gaming consultant for Internet Casino Sports Gaming (I.C.S.G.). “This provides convenience, security, privacy and financial tracking accountability at the highest level. We want our players to enjoy themselves and be confident about the professionalism of the house.
“Furthermore, we can deposit winnings immediately into their accounts. This enables our customers to have instant access to their funds anywhere in the world through participating retailers and financial institutions that honor VISA and MasterCard. You can use it at any restaurant, hotel or supermarket, or withdraw funds from your account at any bank that recognizes those credit cards.”
“It is time for Internet gaming to join the established forms of wagering in this country — horse racing, legalized casinos, card clubs and riverboats — in certain standards of customer service,” said Gallagher. “We believe that in accepting VISA and MasterCard, we protect the customer in many ways. A player cannot be in debt to the house for more than he can afford to post in advance. This is an exciting step for I.C.S.G., and we hope that players will recognize the security and benefits.”
Online gaming is proving to be a thorn in the sides of State Attorney Generals every where and I look for a new round of regulations soon.
Al Massey is a HAL-PC member who can be reached at almas@hal-pc.org.
E-mail me at webmaster@hal-pc.org with any comments you have and tell me what you want to see here.