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January 29, 1998

IBM GLOBAL SERVICES GIVES BANDWIDTH HOGS THE BOOT

By CBR Staff Writer

If you really like to surf the internet, you might not want to go to IBM for internet service after April Fool’s Day. Starting April 1, IBM is going to charge extra dough to its internet customers who surf for more than 100 hours a month. Up until now, IBM’s Internet Connection Service, which is located at www.ibm.net, has been happy to match the $19.95 per month unlimited usage prices that were launched by AT&T’s Worldnet ISP service over two years ago. Most ISPs quickly followed suit, and subsequently many fell on hard economic times – most notable among them being Netcom, MindSpring and PSInet – matching AT&T’s aggressive moves. While it’s hard to say whether or not IBM is making any money in the ISP racket, one thing is clear. Some of IBM’s customers are hogging its modem lines and it won’t tolerate it anymore without being compensated with some cold, hard cash.

By Timothy Prickett Morgan

Under the new service plan, IBM’s ISP customers will get 100 hours of service, which includes email and web links but not personal web pages like many of its ISP competitors offer, for the same $19.95. But every additional hour or part of an hour beyond that 100 hours will cost $1.95. More than once we’ve left the internet on overnight by accident – AT&T Worldnet doesn’t seem to mind – and under the IBM scheme such a mistake would be costly indeed. Of course, some months we surf for hundreds of hours because that is, more and more, how reporters gather raw material. IBM says that less than 10 percent of its current Internet Connection customers surf for more than 100 hours a month, so it isn’t overly concerned about an uprising in its customer base. Big Blue is, however, concerned with offering the best possible access and performance to its ISP customers, and that is why it is putting the governor on the net for customers who hog its modems. They limit IBM’s ability to expand its customer base, especially in residential accounts where people have limited access to modem lines and more times than not get busy signals when they try to hook into the net. Depending on who you ask, IBM’s ISP offering is better than average or quite good, although it is a bare-bones web and email service. An extensive study performed last fall by Boardwatch magazine, which tracks the ISP marketplace, and Keynote Systems, an ISP performance consultancy, ranked IBM’s Internet performance just above average – better than Netcom, PSInet and Sprint, slightly worse than AT&T Worldnet and significantly slower than CompuServe, UUNet, MCI and GTE/BBN. But raw performance on the internet is only half the story; getting to the internet or your email is often impossible with some ISPs, like AOL. A recent ISP study by PC World magazine put IBM’s internet Connection on top of the pack of popular ISPs, mainly because IBM has lots of modems and therefore customers can get in when they want to and because Big Blue’s POP3 mail servers are more flexible – you can get your email from outside IBM’s net through other ISPs if you need to, which you can’t do on AT&T Worldnet, for instance – and more reliable. Also, IBM has support for 56K modems in 500 cities and worldwide roaming privileges across 52 countries – again, IBM’s reach extends beyond its competitors and gives it leverage. And IBM doesn’t want aggressive surfers to take that edge away unless they are willing to pay for it.

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