IN THE NETPLEX
Dueling cybercasts: A cybercast is a live audio or video feed that is digitized and run over the Internet. While UUNET Technologies Inc. in Fairfax, Va., toots its horn with a recent Blockbuster Video Entertainment Awards Web site and a simul-cybercast deal with Paramount's Sci-Fi Channel, Beltsville, Md.-based Digital Express Group Inc. quietly provided a T1 for the Jupiter Communications Consumer Online Services III show in New York City, Feb. 26-28. It followed with a March 7 live cybercast of the White House Conference on Youth, Drug Use and Violence from Eleanor Roosevelt High School in Greenbelt. White House staffers, many of them closet Internet junkies, were pleased with the event.
Stocking up: DIGEX has been equally quiet in a flurry of personnel acquisitions, avoiding the Sunday Washington Post Employment section and instead using a combination of headhunters and through-the- grapevine offers to stock up on people across the board. New CEO Chris McCleary has wasted little time in hiring two executive vice presidents and assorted other personnel to support a national network deployment followed by a public offering by year's end. Total number of new hires may reach 50.
Survival of the fittest: Almost 90 companies are supplying Internet dial-up services to the Washington-Baltimore corridor, with other, smaller firms from New York and New Jersey making noise that they, too, will be showing up in D.C. to steal customers from the others. Larger D.C. bulletin board services, the 40- to 80-line monsters, are also hopping into the pool, leveraging their current customer base and understanding of Bell Atlantic to squeeze a few bucks more per month out of their subscribers.
Are there really enough customers to support almost 90 companies in the D.C./Baltimore area, plus America Online, AT&T, CompuServe, MCI, Prodigy and the Micro-soft Network? The basement-sized firms claim they can hang with the big boys.
On the other hand, most basement start-ups are less than two years old, and some are fraying around the edges as the price-sensitive portion of their customer base clicks over the cheapest guy in town. "Why should I choose you over Erol's?" is an all too popular refrain as people fixate on $14 per month above all other factors.
In many ways, Internet dial-up is shaping up to be similar to the long-distance voice business. Bigger, deep-pocket companies will likely use incentive plans to hang onto current customers and attract new ones.
Virginia is for high-tech, Maryland is for bugs? Virginia state officials are actively courting a third chip manufacturing plant deal to supplement the two plants currently being built by IBM outside of Richmond, and Toshiba in Manassas. Added to the combination of America Online, PSINet Inc., UUNET and many larger Beltway bandits decorating Interstate 95 and Interstate 66, Virginia economic planners must be pleased at their long-term growth prospects.
Maryland, on the other hand, has focused its energies across two administrations on biotech. Lots of small start-up companies have been carefully incubated and fed high-quality fiscal incentives to become self-sufficient and profitable. Officials are starting to worry what further inducements will be necessary to keep successful biotech companies in state, rather than packing their petri dishes for greener pastures.
At the same time, Maryland officials have failed to pay attention to the explosive growth of Internet providers in their own backyard, in some cases giving the appearance of snubbing hometown companies. Maryland's Information Technology Board Chairman Major Riddick has gushed over Bell Atlantic's three-year grant of computers and cash to a single Maryland elementary school, while DIGEX's Maryland Schools grant program has been ignored. DIGEX offered to waive its installation costs and one year of service to the 23 state public school systems. This is the same initiative that got Al Gore and Bill Clinton out to California to pull Ethernet cable for the March 9 "NetDay" school event. Bell Atlantic has much deeper pockets than DIGEX, so why is it stopping at a single elementary school?
Internet City's intrepid reporter covers the hottest section of Washington's information technology market. Tips and tattles are always welcome at email@example.com; please write "Tales of the City" in the subject line.