I am shortly going to be writing a separate document on condition- related issues; hopefully I will be able to write a suggested terms and conditions list for all providers.
The largest provider, Netcom, charges $ 19.95 per month, or $ 17.95 if you bill off a credit card. This is for full, unlimited access. Before they pulled it for repairs, they were charging $ 17.95 per month plus $ 2/hour for SLIP/PPP. Their new NetCruiser service, which is effectively SLIP/ PPP in disguise, costs $ 19.95 per month, including 40 free hours. They also offer unlimited free access during "off-peak" hours, which are defined rather oddly: Midnight to 9:00am. For hours past the initial 40, the rate is $ 2/hour.
Netcom has POPs in many major cities, so statistically it's the most likely competitor for you to come up against. CRL, a major competitor, charges almost exactly the same rates.
When comparing your rates to Netcom's, keep in mind that they have had enormous service problems in the past, and will probably be continuously erratic. See elsewhere in this FAQ for details. New service providers seem to be charging in the range of $ 14-20/month for full-access Shell or BBS accounts. The main action in rates is that SLIP/PPP are now priced at within a few dollars of Shell access, with at least 20 free hours.
IBM's new network provider service, which will sell SLIP accounts designed to operate with its new OS/2 Warp Internet Connectivity kit, is charging $ 12.95/month for up to 6 hours of use, $ 30/month for up to 30 hours. Most ISPs already have lower rates than this, but the IBM name and the sheer convenience of signing up with them should give them market power.
Karl Denninger's MCSNet charges $ 60/3 months, or $ 240/year. If you stay with them for a year, you get two free months, reducing your effective cost to $ 17/month. For SLIP/PPP, the 14-month cost is $ 260, under the same terms.
In the beginning, low rates, friendliness of service and lack of heavy system load may be your best bet, at least when competing with the national providers.
I'm using unique software I wrote myself as a lure, but I recognize that this is not an option for many people. (See the section on BBS software, below).
Billing by credit card has major advantages for both you and your customer. It's definitely the best option for most providers, but it may be exceedingly difficult to get. See below.
There are a number of services now that will set up 900 number billing for you. Your customer calls the number and gets a code; he then calls your system and types the code in. The system is then unlocked for a specific period. You are paid at the end of the telco billing cycle. This is probably one of the easiest options to qualify for, but you only get 2/3 of the total charge; this might be unacceptable to you. People who have used the 900 number and received your services may also attempt to contest the charges on their bill. Due to the sleazy reputation of 900 number vendors and systems, this is normally granted as a matter of course by the local telco.
Finally, you can get people to pay by check. You get 100% of the charge, and you get it now. The bad news is that many people who will blithely charge billions on a credit card have an amazing resistance to getting around to sending a check in the mail. Unless you have your strongman Guido around to collect from your customers, this might not be the best solution. You should always accept this form of payment, since it's the simplest type for you, but you should not count on your customers doing it. It's generally best to offer tempting discounts for longer terms, since it's a big hassle getting people to send in a check every month.
There are two issues surrounding the world of credit cards. The first is how big a percentage they nick you, and the second is whether you can get them to accept your company at all.
Most credit card processing companies are leery of any businesses selling services, especially out of the home. You will find it much easier to get their attention if you have physical business premises, instead of your garage.
A company called Teleflora - that's right, a florist delivery service - has made quite a nice little sideline business out of processing credit card orders for bulletin boards and similar operations. However, they now appear to be out of this business (as of November 7, 1994).
Ben Bradley
For more information, drop a line to credit@netsouth.net.
Chris Hawkinson
* Pay a special annual fee
* Have the worst discount rate
* Have an 800 number which appears on credit card statements.
Second, just because you have received money, it doesn't mean you won't
have to give it back. Chargebacks can occur up to a year later with
just cause. "Further, since an online system usually doesn't have the
normal signature receipt, the customer is almost ALWAYS right."
Finally, he notes that extremely tight security is necessary for a
system that keeps credit cards information online, since crackers are
attracted to card numbers like ants are to sugar. Perhaps the best
way to do this is take the card numbers and copy them to a remote
system inaccesible to the public.
Chris Myer (cmyer@su102a.ess.harris.com) did a complete survey
of net.wisdom on this topic. He came up with the following
additional comments on how you might get accepted for a merchant
account, and what kinds of rates:
1 Get an account through a local bank. Chris says this isn't very
likely, unless you have very substantial dealings with them. "These
guys don't understand the 'net, and will simply consider you a
mail-order business. If you are home-based, forget it. Your only
hope is to get an employee of the local bank to go to bat for you--in
a big way!" Karl Denninger
2 Independent Service Organization. These people serve as
go-betweens, insulating you from the more stringent standards
banks require. According to Chris, "Many of these companies
charge horrendous up-front, non-refundable fees, but some are
reasonable."
The most well-known of them is Teleflora. Evidently these guys
decided that they would become ISO's, and they are big believers
in BBS's. Fairly large non-refundable application fee.
Unfortunately, they seem to be leaving the business at this
time. (800) 325-4849. (x2076?)
Card Service is another outfit that's been mentioned. Unfortunately,
little information is available about their serivces. Card Service,
(800) 944-7164, or try (800) 947-3650 (faxback, request 765.)
3 Discover Card: "Evidently, they not only provide Discover
cards, but once you get one of those they will also provide access
to Visa/MC merchant accounts. Call (800) DISCOVER (347-2683 for
the alpha-numerically challenged) and ask for Merchant Services."
Here's the information from Chris on what kind of rates you can
expect to pay:
Samples of Rates Charged:
=========================
Visa/MC: 2.20%
2.25% plus $.25 per transaction, plus $2.00 statement
charge.
2.32% plus $5.00 per month.
3.0%
3.5% plus $.30 per transaction.
4.0%
Discover: 1.9%
3.25%
AMEX: 3.25%
4.5%
Terminal: $21 per month, or $200 outright.
$600 outright, $75 for repair.
The following is copied straight from Chris' message:
Suggestions for Getting Accepted:
1 Try to avoid being labeled "home-business", "mail order" or
"telemarketer". I don't recommend lying if you fall squarely into
one of these catagories, but don't let them put you there if
you're not.
2 Minimize the amount you predict you will charge. Due to the
fact that charge-backs can be made for up to 6 months after a
transaction, the bank's amount "at risk" is 6 times the predicted
monthly amount.
3 When working with a bank be prepared to keep liquid assets in
the bank equal to or greater than their "at risk" amount. This is
usually necessary for no more than 6-12 months of good charges.
Suggestions for Protecting Yourself:
1 Try to find some way to get a signature on file. One way I
thought of was not only to have them fax in the card number and
their signature, but a photocopy of their picture ID with signa-
ture on it.
2 Make sure you have a way to verify that the ship-to address
for your product (if you are a retailer) is the same as the
billing address of the credit card holder.
There are a number of billing programs out there for Internet
providers. A company called Interstate has written a "thorough
billing system called 'im', or 'INC Manager'." It keeps track of
billing, pro-rating, account creation, expiration and bill and label
printing. Cost is $ 125/site license. [I have gotten several
enquiries for company contact information; unfortunately, all I know
is what I wrote here. Perhaps someone from Interstate can come
forward with something?
A system called IOU is promising, but still under development with
some serious bugs, according to a beta tester of the system. You can
learn more about IOU http://www.tpoint.net/iou/.
Edward L Haletky
IOU supports BSDI 1.1 and 2.0, HUPX v9.0.x, IRIX, Linux, MachTen,
OSF/1 v3.2, SCO, Solaris 2.4 and Solaris x86, SunOS 4.1.3 and Unixware.
The current version is 1.2.
I'd appreciate comments from other users so I can provide an impartial
update of IOU's status.
A new, up and coming system is called UDA from RTD. Check out
ftp.rtd.com .
There is another system called IAF by Solect; more information can
be found at http://www.solect.com/
Several different approaches have been taken to increase the user
friendliness of the Internet, traditionally a rather cold place
for new users.
SLIP and PPP are serial protocols that get your customers directly on
the Internet, so they can use tools on their own computers. This has
three basic benefits: (1) they can get easier to use Windows or
Macintosh versions of Internet software, and control exactly which
programs they use; (2) they can receive graphics directly over the
net; and (3) they don't use power from your CPU unless they are
accessing your disk (by reading news, for example). Unfortunately,
it is quite complex to set up, although most people figure it out
eventually.
SLIP and PPP appear to be the future of the Internet. There is an
increasing amount of software available that will only run in this
way, and most of it is in the graphical format appealing to consumers.
Most people who run an ISP and want to be able to charge significant
sums of money for access need to offer SLIP/PPP.
You need something called a terminal server to offer SLIP. It's
very expensive. (See the hardware sections).
Some programs have now been written that simulate SLIP for shell
account users. They will work, but are harder on your system load
(because they use your shell account computers) than real SLIP/PPP.
This should significantly lower the cost of SLIP accounts in the
future, a trend that has already developed considerable steam.
One of these programs is called The Internet Adapter (TIA); some
kind soul should give me a pointer to it. I believe a single-
user license is $ 25, and a full system site license is $ 495.
A free trial period is available.
IBM already has SLIP client software in their new OS/2 Warp product.
Microsoft is planning to add this to Windows95 as well. So it should
become easier to operate SLIP services as time goes on.
Craig Warner
My personal experience with SLIP has been edifying. I have an IBM
ThinkPad 750C laptop with 8MB RAM, a 340MB hard disk and a brand new
TDK 28.8kbps PCMCIA modem. I tried Trumpet Winsock and both the Cello
and Netscape WWW browser programs, and had very curious results.
Things would work fine (albiet slowly) for a while, and then the
system would suddenly be unable to find its name server. This usually
didn't take very long to happen, and it made use of the SLIP
connection very exasperating. Judging by the Trumpet Winsock output,
it would appear that the system was getting communications overrun
errors, which I guess means that it cannot keep up at high speed on my
machine. The PCMCIA modem, of course, has a built-in 16550a UART.
I tried SlipKnot and found it very clever and much easier to work with
than real SLIP. It was about the same speed, too. So if you have
trouble figuring out SLIP, you might recommend SlipKnot to your users.
Unfortunately, it requires use of a Unix shell account, so BBS users
are out of luck. I may add SlipKnot support to my BBS, which would
involve simulating a Unix shell account with limited functionality.
On the whole, I actually preferred SlipKnot to the other WWW browsers
I used during my SLIP trial. However, the Netscape extensions have
gotten so important that I now use Netscape for just about all my
browsing, despite SLIP's flaws.
Note that the CIX (see our section on them) requires membership if
you are relying on a CIX provider for your connection and you resell
SLIP/PPP. How this applies to TIA (the simulated SLIP/PPP) is
unclear at this time. This whole thing, however, may be completely
moot. Again, check out the CIX section for more information.
To offer a SLIP connection, you need the following things:
Most of this software is shareware, and there are some complex
distribution conditions. For the most part, you cannot distribute
SLIP software pre-configured for people's systems without paying a
license fee to the software's owner. Some of the software, including
Netscape, cannot be legally distributed on a disk without a license -
and licenses for Netscape are expensive: $ 17/copy with a minimum buy
of 500 copies.
What most people do is distribute a rather minimalist startup kit,
normally including Trumpet Winsock (said to be the least bad of the
available TCP stacks) and public domain FTP, Gopher, mail and WWW
clients. Customers are then given instructions to set up the disk,
and can then download Netscape from the main Netscape www site.
Note that the version of Netscape sold on a retail level has startup
access for various commercial Internet providers such as Netcom and
CompuServe; its configuration procedure is apparently severely biased
against local ISPs. This might be worth keeping in mind when deciding
whether to use those Netscape extensions ...
Soorena Salari
A test drive version is available for your trial at
http://www.ccsweb.com/inetmgr.
Windows95 includes dial-up networking out of the box. As a result, configuring
new PPP users (Windows95 doesn't use SLIP) is quite a bit less difficult than it's
been in the past. A site called Windows95.com [ http://www.windows95.com/]
has an excellent set of instructions which I believe you can provide to your
customers. They'll save you hours of hideously boring technical support.
If your users are currently using Windows 3.1 and upgrade to Windows95,
they will find that their existing Windows software almost certainly will
not work. To fix this, they can either set up Windows95 dial-up networking,
or find their old winsock.dll file (which I believe is renamed to winsock.old)
and overwrite the Windows95 driver with it.
If your users presently have Trumpet, I strongly recommend Windows95.
Its dial-up networking is significantly easier to set up than Trumpet, and
it seems quite a bit more reliable as well.
The Pipeline, a NYC-based Internet provider, took a different approach.
They wrote their own customized terminal program that basically makes
their system look like SLIP/PPP without all the headaches. It's clever
and works well. Unfortunately, as of last writing, they were asking
a rather massive price for it. You can try it free of charge on their
demo line; telnet to pipeline.com.
At one time, I was planning to write a similar GUI front end for
my own customized software. However, the stampede towards Netscape
and PPP connections has made this look like a fairly poor idea at this
time.
Bulletin board systems, such as TBBS and Major BBS, are rushing into
the Internet bandwagon. Traditionally, the interfaces used by both
these programs are far too clunky for efficient newsreading, and
that is virtually the only service they've been able to offer. How
much this changes will determine how much influence BBS vendors finally
have on the Internet world.
I am presently writing a customized BBS interface that I rather like.
I'd better like it, since I wrote it. :-) Telnet to amazing.amazing.com
or call (818) 997-7500 to check it out at no charge.
Eric S Raymond
"I know of three major projects to produce a UNIX BBS interface suitable
for use by ISPs -- FreePort, InterLink, and Chebucto Suite.
"FreePort is the BBS interface used by NPTN, the National Public
Telecomputing Network, and its affiliated Free-Nets. Despite its
name, it costs $850 to license from Case Western Reserve University.
And it is an utterly awful implementation of a clumsy, stupid design.
Most of the traffic on its lists, freenet-tech and freenet-admin, is
disgruntled Free-Netters wishing desperately they had something
better. To see for yourself, rlogin as `visitor' at freenet.fsu.edu
or yfn2.ysu.edu."
I - the FAQ maintainer - wanted to check out this claim, so I did
exactly as Eric suggested. Sure enough, the Free-Net software is
awfully clunky for an $ 895 program. It's inarguably simple, but
the user interface is far from the best. It looks a lot like a
stripped down version of Galacticomm's Major BBS; unfortunately,
that's not a compliment.
Eric again: "InterLink is the interface I wrote out of complete disgust
with FreePort. It combines the ease of use of a menu-based system
with the feel of a MUD (multi-user dungeon) game; it has unique
features for decentralized administration; and the code is simple,
flexible, and easily extensible. This software is production-quality,
supporting more than 1000 users as of November 1994, and is far superior
to FreePort in every respect, but I have not yet released it; I'm in
the midst of a redesign for better integration with WWW. To check it
out, telnet to locke.ccil.org."
I checked it out, and it is indeed a slick, nicely designed and
easy to understand program. It has a much more modern look and
feel than the FreeNet software, and it's considerably easier to
figure out.
The David's Amazing Internet Services software - otherwise known
as my own - is very different from either program. Anyone interested
in checking out the state of the Internet BBS art should definitely
take a look at all three systems. Which one is better? I'd say
it depends on your own personal taste.
Eric continues:
"There is a project called `Chebucto Suite' under development in
Canada, with goals similar to those of InterLink. From their
prospectus, it appears that they already have full WWW integration
(the Chebucto browser is a souped-up version of the WWW lynx client).
They appear to be behind InterLink in some other areas, notably
administration tools. I don't know where Chebucto Suite is actually
running; contact David Trueman
Earlier, Eric was quite keen on integrating his project with Chebucto
Suite. However, he recently wrote the following: "The Chebucto
people seem to have fallen into a hole. They're not answering mail,
and I've heard nothing about them on any of the FreeNet lists."
Many people are now using a World Wide Web browser, such as Lynx, as
their main menuing system. This is easy for most people to use, and
can take them to all sorts of interesting places.
Some people have trouble with this because Lynx won't work properly
unless your VT-100 emulation is exactly perfect. However, the
flexibility and ease of use are certainly there.
A company called Interstate has written a menu shell in Perl that
features complete full-screen operation. A site license for it costs
$ 75. Unfortunately, I lost the message with further information.l
Possibly. Draper Kauffman
The main advantage of this idea is that you have 24 hour a day 7 day
a week monitoring and support by his already-existant ops center. This
would be horribly expensive for you to do yourself.
The main disadvantage of this idea is that you have no control over
your own system; in reality, you're selling someone else's product and
not your own. If you (like me) are starting a provider to put your
own personal stamp on the world, this is definitely not for you.
However, if you want money and you're in a market with low
competition, you could probably charge $ 25/month and pocket the $ 10
difference without doing anything more strenuous than maintaining
your modems and router.
Note that, since this would be a telnet only situation, you would
almost certainly require a T1 connection, since 100% of your users'
time would be using the Internet itself quite intensely. The high
bandwidth required might offset some of the administrative savings
of the proposed plan.
However, it can be an effective way to build a strong customer base
at the start, where cash for hardware, software and customer support
staff is hard to come by. You also have more time for marketing your
service, and it's easier to sell a full-service account for $ 25
than a semi-reliable account on a start-up system for $ 18.
Draper suggests that your initial goal should be to build up your
system in stages to handle 750 to 1,000 customers using 64 lines and
modems and a T-1 line. If you charge $ 25 per customer and pay
about $ 30/line and $ 2,000 for your T-1, you net somewhere around
$ 4,500 to $ 6,000 per month with no payroll. Then, with this kind
of strong cash flow, you can easily add the drives, CPUs and staff
you need for complete services, and gradually bring your customers
back to your system full-time.
A Phoenix, AZ company called Primenet is now selling Internet
franchises, which work in a very similar way to Draper's plan. I
have seen their franchise agreement, and it appears to be incredibly
slanted against the franchisee. I urge anyone interested in that
franchise (or any other) to read the agreement carefully before
deciding to invest.
Another company called Internet Online Services (IOS) has also
been forming cooperative agreements with users; unfortunately,
their very low rates and massive national advertising has resulted
in horribly poor service (see http://www.thelist.comand look them
up for the gory details).
Draper Kauffman himself seems to have disappeared, and I have
heard from some io.com users that service has deteriorated
significantly in recent months.
Next section: What sorts of technical problems should I expect?
10.5 Billing Software
10.6 Making the Internet more User-Friendly
10.7 What are SLIP and PPP?
10.8 What do you need in order to offer SLIP or PPP?
Infinite Patience
You are going to be dealing with unreliable software being used by
largely clueless Microsoft Windows users. You will need to give high
quality phone support to these people, or they will never manage to
figure out how things work. This is probably the most severe problem
with offering SLIP
A starter kit
SLIP software is complex. In order to offer SLIP, you have to supply
your users with a disk or disks containing software to install on
their computers.
10.9 Do any companies offer starter kits, or do I have to roll my own?
10.10 How has Windows95 changed the SLIP/PPP picture?
10.11 What about proprietary GUIs, such as the Pipeline?
10.12 What about BBS Interfaces?
10.13 What about menu interfaces?
10.14 Is there an easy, painless way to provide Internet services?