Talk:Chapter 7 - Craving for Connection II

From NetHistory

"Telecom did not appear to be using a dominant position to harm competitors, and was simply using every incentive to keep its access prices as low as possible to encourage the market to expand more rapidly."

ROTFL ... oh yes very very funny! Wait a minute while I pick myself up off the floor here ... Telecom did *everything* it could to kill it's competitors, which included all the original ISPs. Parahelion 23:22, 4 November 2008 (UTC)

With all due respect, Parahelion, Telecom actually didn't go after the existing ISPs. There was a pretty strong feeling thet they were using their market dominance to compete unfairly with smaller players (and they did have a larger marketin budget), but the reality was that pricing was not anticompetitive. In fact, their initial pricing was quite steep.

Even when there was a drop in pricing ('97, which caused a huge outcry among small ISPs), it was to $2.50/hour. For a user doing 30 hours dialup time a week, that's $75, which was very comparable to what a NetLink user ($30/month for 30 hours, $1/hour thereafter, $1.60/MB international traffic, all ex GST) would do at that time. Remember, there was no YouTube, images were (usually!) small and minimal, so users doing 10-20 MB traffic per month were pretty normal. And NetLink was not by any stretch of the imagination trying to be the lowest priced in the market -- I seem to recall that IHUG were doing flat-rate by then in the $30-$40/month range.

Basically, it was an entry into the market by a player with deeper pockets and therefore the ability to take a longer view. Most ISPs at the time were working on same-year paybacks on their investments, which was nice while it lasted but couldn't possibly be sustained in a maturing industry.

-- Don Stokes (ex NetLink)