Internet Service ProvidersGrow With Area Demand

Rising telephone rates will change the Internet industry in Arkansas (see related story on page 15), but it’s unlikely to slow growth in the number of Internet service providers within the state.

As the popularity of the Internet grows, so will the number of ISPs.

The Internet industry has exploded in the past two years. Boardwatch magazine recently reported that the number of ISPs had increased from 1,443 in February 1996 to 4,354 by October 1997.

Internet service providers usually experience an exponential growth of 120 percent per month, says Charles Sharpe, president of Arkansas.net of Fayetteville, one of the area’s largest ISPs.

But competition for customers is fierce. The number of people who want Internet access is growing steadily, but the supply — Internet access — is still greater than the demand. The market is limited to consumers who own computers.

The Business Journal has attempted to rate local Internet service providers by the number of dial-up customers each has. Comparing the number of customers a company has to the number of modems it owns gives the modem-to-user ratio, a measurement commonly used in the industry to determine an ISP’s service level.

The lower the ratio, the less likely a customer will get a busy signal when trying to connect to the Internet. The industry standard is 10 customers to one modem.

Northwest Arkansas companies were reluctant to reveal the number of their dial-up customers, however. Some cited company policy; others expressed doubt about the accuracy of figures given by their competitors.

“Some ISPs are not truthful about that, so we do not give that [information] out at all,” says Jeremy Webb, president of Interface Computer Center of Fayetteville.

Other ISPs say that the modem-to-user ratio is not a good indicator of service because customers with unlimited access contracts (the most common type) are likely to spend more time on-line, increasing the likelihood of busy signals for other customers.

“Our policy is no busy signals,” says Pat Rakestraw of Bitstream Associates in Siloam Springs. “So we generally run less than a 10-to-one ratio, but the ratio does not really matter. Our policy is that, if we ever get a log-in on our last modem, we go and buy two more lines.”

With 25 employees, Dixieland Electronics in Rogers tops the list of largest computer dealers in the area.

In addition to retail dealers, Northwest Arkansas is home to numerous tiny companies, whose owners build computers in their homes.