When Peter Ashdown started Utah’s first Internet Service Provider (ISP), it was a single Sun server set up in the closet of a friend’s clothing store.
The success happened by accident,” Ashdown said. “I never intended to have employees or open an office.”
Ashdown started using the Internet in 1987. At that time, few companies had Internet access and even fewer individuals were personally plugged in to the wave of the future.
As Ashdown began to envision the convenience of home Internet access, he figured there had to be a market among techies, if no one else. He devised a business plan and started making his pitch to banks. Ashdown quickly discovered that most businesses did not recognize the great potential behind this new technology.
Rejected by every prospect, Ashdown packed up his business plan for revisions and headed to his father’s house for a weekend visit, mistakenly leaving the business plan there. Ashdown’s father must have shared his son’s acuity, because a few days later he offered to finance the company.
In 1993, XMission’s first year of business, the company served close to 400 customers. When the firm celebrated its 10th anniversary in August, that number had grown to more than 20,000 customers.
connect recently met with Ashdown to discuss the success of his company and the changes he has seen in the new Internet age.
connect: How has broadband changed the way you set up your infrastructure and the services you offer your customers?
Peter Ashdown: It has made it significantly easier than dial-up because with dial-up, there is a whole host of modem connectivity issues. There are dozens upon dozens of different brands of modems, and they all have their own quirks. That was always a support-intensive task; trying to figure out why somebody wasn’t getting the speed they thought they should be getting with their phone line. It could be anything from their modem to the wiring in their house, to a genuine problem with the phone company. Diagnosing that is always very difficult.
DSL, however, once you get it running and it’s solid, you don’t have as many issues. It’s not trouble free, but it’s much easier for our techs to deal with than modems are. There are a number of indicators we can look at, both from our side and from the Qwest side, that help us build a good connection.
connect: What percent of your customers still use dial-up versus broadband?
PA: I’d say about 60% are still on dial-up. Dial-up is not showing the growth that we saw in the past.. Existing customers will upgrade to DSL and the dial-up is freed for new customers. I’m not sure whether we’re growing as far as new subscribers in dial-up, but we haven’t needed to buy new dial-up equipment in the past two years.
connect: Did XMission feel threatened a few years ago with the surfacing of DSL, cable and other broadband sources?
PA: Well, we were right there at the beginning with DSL. Thankfully, Qwest has seen the wisdom in having us on their network. We sell DSL through Qwest to service our customers. Overall, DSL has been good to us; we’ve got more than 5,000 people on DSL now.
As far as cable goes, there certainly are situations where cable is eating our lunch. If a customer cannot get DSL, but they can get cable, they’ll drop us. We’ve had a lot of letters from remorseful customers about the fact that they have to leave XMission. Even though they really enjoy the service we give them, primarily they want broadband, and the only way to get it is through cable. I really don’t blame them for doing that.
connect: What do you see in the future for XMission?
PA: Well, we’re stepping out of Utah. We’ve started promoting XMission service in Las Vegas. That has gone all right — not as fast as I would’ve expected. I think the major struggle we have now is that everyone has Internet access. Our challenge is differentiating ourselves enough from the other Internet service providers to motivate people to change their service.
During the Internet boom, I had about ten offers to sell the company and I am very glad to this day that I didn’t because I think that in all those cases, the company probably wouldn’t have survived. It would’ve either become something else or been run into the ground. I think one of our major strengths is the fact that we have been around so long. We’re solid and people signing up with us can expect us to be around for another 10 or 20 years. If I have my choice, XMission will be privately held and we’ll be doing business the way we always have.
connect: How do you anticipate we will access the Internet in five to ten years?
PA: Well one of the things I’m backing [verbally] is the UTOPIA Project. I really think that it’s the only way the populous is ever going to see fast, reliable connections. UTOPIA is a metropolitan project to lay fiber optics throughout participating cities. The idea is that in a participating city, every home and business would be connected to a fiber network. It would then be resold to Internet service providers or media providers like cable television and telephone providers. Instead of all these different services coming from different ways into your house, you have one fiber coming in that has a huge Internet potential and a huge speed potential.
I don’t believe commercial entities like Qwest are interested in investing or building a network like this because the turnaround on investment isn’t quick enough. With UTOPIA, it’s a metropolitan plan and they’ve been very frank that the turnaround on investment is 20 years. It has its share of criticisms, and I don’t know that this kind of advanced project will fly in Utah, but I think it would be great if it did. It would be very beneficial not only to XMission as an Internet provider, but to the populous and economy as a whole because it would make it very attractive for technology companies to come here.
If UTOPIA doesn’t fly, we may see a lot more DSL coverage from Qwest. Wireless is something that other companies are doing a lot that we [XMission] don’t do on a residential basis. I think that wireless is definitely going to become more widespread. You’ll be able to use it in just about any building you walk into. As far as wireless commercial opportunities, I can’t tell. I think one indicator about how difficult it is to run a wireless company is the fact that wireless has been around for quite a while and there’s still no national ISP doing wireless every where. Doing what they call the “last mile,” —from the ISP to the residents or business—is something that XMission has always stayed out of. One time, we did web design and that’s very lucrative for some companies, but it wasn’t good for us. I think it’s very important for us to stay focused on what we do best, which is managing the network, keeping things secure and having robust high bandwidth to the Internet.
connect: What good and bad cultural changes have you seen as a result of the transition to Internet lifestyle?
PA: As far as good impacts, I've been amazed at the amount of relationships and connections people have made over the Internet and how pervasive it is in something like a high school. Everyone knows what instant messaging is, everyone has an e-mail address. These are much faster and more efficient ways to connect people to anything they want to do, be it personal or business.
As far as negative impacts: the rise of spam and the increased security risk. When XMission started, there were no spammers. You had an open mailbox, and all you got in it was e-mail that you wanted to receive. Seeing the abuse of the Internet has been an unfortunate side effect of its popularity, spam being the primary abuse, and causing a huge financial issue for XMission. We have probably along the order of $20,000 of hardware that we use to handle e-mail for our customers. Fully half of it is dedicated towards dealing with spam. The significant hardware, personnel and bandwidth costs are a huge waste of time.