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Impact of Wall Street Crisis on ISPs

Are we at risk?

     
8:16 pm on Sep 29, 2008 (gmt 0)

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I am not sure where to post this but I think it is a timely issue. Many of us depend on internet marketing as a huge chunk of our total marketing effort. Now that the House has voted against the bailout and stocks are tumbling, what impact will this have on our ISPs? Will some of us find ourselves up the creek with ISPs, web hosting services, and even search engines going out of business? Where can we find information about the financial viability of the organizations on which we depend for our internet presence?
9:50 pm on Sept 29, 2008 (gmt 0)

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I am not sure I see the connection between Wall Street firms vanishing from the planet and ISPs. If an ISP or any other type of web based company is solid, well marketed, generating cash, and low on debt and doesn't need financing to expand you should be fine.

However if you are referring to the overall health of the economy, no doubt that is going down the drain. However again if you have a solid business and spend time marketing and don't have a ton of debt or expenses you can probably ride this out without too much pain.

9:58 pm on Sept 29, 2008 (gmt 0)

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I guess that if an ISP has thousands of customers who no longer pay their bills, or a hosting company hosts websites for companies that no longer need a website because the company has folded, then they could be overstretched. What would you do with a few thousand servers that have nothing installed on them?
10:37 pm on Sept 29, 2008 (gmt 0)

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There will be less money available for investment. This means ISPs will be more inclined to solve current bandwidth problems by capping people :(
4:14 pm on Sept 30, 2008 (gmt 0)

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ISPs and other "telecom" services rely heavily on public investment -- i.e. new data lines being run, fiber optics upgrades, changes in codes to allow for upgrades, permits for work, etc. all paid for by the tax payer. Depending on the next Pres., this could work out well for such companies. If money is thrown at public works, they'll prosper, if budget cuts on publicly consumed IT expansions and infrastructure occur...well...they already have horrible service, but we might just find out what the lowest common denominator truly is.
12:45 pm on Oct 3, 2008 (gmt 0)

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new data lines being run, fiber optics upgrades, changes in codes to allow for upgrades

I don't think this is correct. Most telecom companies or ISPs are private businesses and therefore must raise their own cash, not tax payer dollars, to invest in new lines. In my area we have one large telecom company and all the fiber they have laid is completely self funded or funded by selling bonds in the market to finance the project.

What I am not sure about is how much, if any, subsidies or tax breaks telecoms get for expanding services into a new area from the government. Even if the financial sector turns into slag I doubt those tax cuts will go away. There are lobbyists and bribes to politicians that will see to the continuation of any tax subsidies.

2:37 pm on Oct 3, 2008 (gmt 0)

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I thought that, as part of keeping monopolies in check, they had reverted to more public funding for such "publicly consumed goods". That way, you may receive service from any provider in your area and avoid being held hostage by the owner of the lines. Maybe line owners are just charging rent/usage fees to other providers? or gov't is "renting" to the service providers? I am not sure how such utilities truly operate anymore, as some areas are being privatized while others are becoming public again...so I apologize if I mispoke.
3:04 am on Oct 5, 2008 (gmt 0)

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That way, you may receive service from any provider in your area and avoid being held hostage by the owner of the lines

You mean the government actually compensates a business for an adverse regulation...fat chance. The changes in the communication regulations took care of the "monopolies" but actually that just fixed an earlier government created problem. I doubt they received any type of compensation for this change in regulation, that would be totally out of character for government. They would rather just change the regulations and give earmarks to campaign donors

2:33 pm on Oct 6, 2008 (gmt 0)

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You mean the government actually compensates a business for an adverse regulation

I did not mean compensation; sorry for the confusion. More that the infrastucture involved was more like a highway -- everyone benefits, but no individual is willing to shoulder the cost. They are publicly consumed goods with the service provider acting as a free-rider. Did Comcast and Adelphia bury cables in my neighborhood? Or was that done by the developer? How can I get one ISP and my neighbor use another on the same cables? Is Comcast actually nice enough to allow Adelphia to use their lines?

I honestly don't have the answers here...just assuming that the government was some how involved as with water and electricity. I.E. Even if you receive power/water from a private company, the grid is publicly produced and owned...

9:31 pm on Oct 6, 2008 (gmt 0)

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just assuming that the government was some how involved as with water and electricity

You are correct the government is definitely involved. In the case of electricity it is a heavily regulated industry, but all the lines that carry the power are "owned" by the electric company. However they can't really do what they want with them because of the heavy regulation which controls price, delivery and a host of other factors. Water (at least in my part of the country) is completely government controlled and set up... who makes up these rules?

The infrastructure for ISPs is also privately owned, but again is heavily regulated by government which will control taxes, prices, and other items that will have an impact on the industry.

Many would argue that the current Wall Street mess is a result of regulation and government meddling and others will tell you there wasn't enough regulation and that is what caused the mess. What impact any of this will have on ISP growth and expansion is probably too early to tell at this point since raising money for private firms to expand may be challenging for the next few years.