It's A Jungle Out There

ive years ago, the Internet was dominated by researchers and academics sharing data about gene sequencing, the chemical properties of the Earth and the molecular makeup of matter. But today the Net is crowded with companies keeping track of their worldwide operations, people E-mailing friends and family, and any number of other activities.

Access providers have actually been proliferating since about 1991, and users can now choose from a range of services with different features and rates. Some services cater to the needs of businesses, others to the individual Net surfer.

Three of the largest companies that offer Internet access across the United States are Herndon, Va.-based Performance System Inc.; Falls Church, Va.-based UUNet Technologies Inc.; San Jose, Calif.-based NetCom On-Line Communications Services Inc. Both SprintNet and Advanced Network &amp Services (formed by IBM, MCI and Merit) own backbone lines that stretch across the continent.

The dark horse among Internet access providers is Rupert Murdoch-owned Delphi Internet Services Corp. of Cambridge, Mass. Most analysts don't consider Delphi an Internet providers since it has established itself as a commercial online service, like Compu-Serve.

However, over the past year, Delphi upgraded to provide full Net access, something no other online service provides. And Delphi has been advertising itself as an Internet provider. Considering CompuServe announced it would launch a division to provide Net access and America Online already offers almost half of the Net features people use most, the lines are growing blurry.

But no one as yet -- especially among exclusive Internet providers -- has truly national coverage, said Mike Walsh, president of Internet Info, a market research firm. There are significant spots across the country, like Montana and New Mexico, where "national" providers just don't reach, he said.

"In fact, there is not a lot of additional advantage to being a national provider other than clout," said Walsh. In the end, how well the network actually works will define who is the best provider, he said.

In quantitative terms, PSI probably tops the Internet provider list for delivering access to the most customers in the United States. PSI's Jim Bergmann said PSI focuses on "providing a national solution with first rate customer support."

Regional access providers, as the name suggests, provide Internet services in certain parts of the country, usually around major metropolitan areas. In most regions of the United States, there are now between three and ten providers.

The majority of U.S. Internet activity is occurring in four areas of the country: San Francisco, Boulder/Denver, Boston and Washington, D.C. All of these markets, except for Boulder/Denver, are highly competitive. In Colorado, regional provider Colorado SuperNet Inc. has been able to dominate the market by providing consistently high-level performance at a good price.

Three urban areas that have been slow to tap the Internet lode are Chicago, Los Angeles and Houston, said Walsh, who produces a monthly report showing growth in Internet usage. Houston, Dallas and a few other markets are still more or less wide open, he said.

It is no coincidence major Internet activities occur around cities. In the most rural areas of the country, there are telecommunications problems, usually with bandwidth or the quality of pipe that typically make accessing the Internet more difficult, slower, and more expensive.

As the Internet matures, there is going to be a shakeout in the market for access providers, both on a local and a national level, Walsh predicts.

And the winners will be the providers that come through with consistently superior service at a good price.

STIFF COMPETITION IN D.C. MARKET

As Internet hotspots go, the Washington, D.C., region ranks near the top of the list. It's considered the fourth-most Internet-active region of the country. (San Francisco, Boulder/Denver, and Boston capture one, two and three respectively.) The Capitol region boasts a 10 percent growth in sign-ups per month with about 1,200 companies hooked up, many of which are high-tech or law firms.

But the large number of users has created a highly competitive market for Internet access providers. The Netplex market is currently dominated by three players: UUNet, PSI and a strong regional provider, Digital Express Group of Greenbelt, Md.

Digital Express was an early Internet provider in the D.C. market, and it has been difficult for other regional providers to capture a significant share of customers. The company started about three years ago and was made up of four telephones in its founder's basement. But time has more or less run out for the mom-and-pop-style Internet provider to enter the market, observers say.

Digital would neither confirm nor deny it intends to continue spreading its coverage across the United States. It has already extended outside the Washington, D.C.-Baltimore region to provide access throughout Maryland, New Jersey and parts of New York. Digital Express provides Internet access to Washington Technology.

Other smaller providers in the region include ClarkNet, CapCon, Capital Access, and the Meta Network.

Walsh of Internet Info said the competitive market also has made it tough for new Internet providers to make a lot of noise and attract customers.