Special To Inter@ctive Week - February 10, 1998

ISP Customers: Reliability Wins

By Rebecca Wetzel

Last fall, Inter@ctive Week and PC Week published preliminary results of the first annual TeleChoice Inc. Internet service provider survey, in which business users were asked to rate their ISP. Since the October 1997 publication, additional responses have come in, enabling the expansion of the survey's results to include more ISPs.

This update reflects another 200 completed questionnaires that arrived after the initial publication. The overall response rate was 33 percent, which is high for mail service. Late replies often better approximate the opinions of people who don't reply, so changes to the ratings that are the result of the late respondences have special significance.

The point of this study is that an ISP's ability to provide reliable service is the single most important criterion for businesses selecting an ISP. Reliability also is tops when businesses select a Web outsourcing vendor. Ninety percent of respondents rated reliable operations as the top Web outsourcing selection criterion.

The premium placed on reliability should come as no surprise to ISPs. Internet connectivity is, after all, the core service they sell, and customers rely on the service to work. With many ISPs focusing resources on increasing market share through massive marketing and merger and acquisition efforts, however, operations and infrastructure have been severely strained at most service providers, and their ability to keep up with customers' needs has wavered in some cases. Here is our updated report on how the ISPs are keeping up, and even moving ahead of the pack in the eyes of customers.

In the final analysis, the five most important criteria continue to be service reliability, service performance, speed of repair, competence of the technical staff and price. But the order of importance has changed. In the preliminary findings, service reliability was rated most important, followed closely by service performance and then by speed of repair. In the end, however, competence of customer service and technical support edged out price for fourth place. When push came to shove, competence won by a nose over price.

Who's On Top
UUnet Technologies Inc. (www.uu.net) held fast to its first-place ranking -- with its overall score actually increasing by 3 percent. AT&T WorldNet (www.att.net) continued in second place and GTE Internetworking (www.bbn.com) placed third without notable changes in scores.

The most interesting development occurred in the fourth and fifth positions. MindSpring Enterprises Inc. (www.mindspring.com) was previously not in the pool because it did not receive a sufficient number of responses. That changed with the additional responses. MindSpring not only joined the ranks, but was rated fourth overall. No single local phone company received enough rankings to be included by name, but the category of all local phone companies combined did reach critical mass and, as a group, did well, rating fifth in the pack of 13. MindSpring and the local phone company ISPs edged out MCI Communications Corp. (www.mci.com), though MCI's rating was basically unchanged.

Since reliability is the most important ISP selection criterion, a good showing in this category carries considerable weight. Previously, GTE Internetworking was tied with UUnet for first place, but additional responses broke the tie, and GTE Internetworking took the lead. The phone companies, as a group, came in third, then AT&T and MindSpring. This top tier of providers had much better scores than the rest of the pack, with a full 12 percentage point spread between the fifth- and sixth-rated ISPs.

For the second most important criterion -- performance -- UUnet tied with the local phone company pack for first place; GTE Internetworking remained in second place and AT&T in third. Again, there is a clear tier of top-quality providers, with 9 percentage points separating the third- and fourth-rated providers.

In the speed of repair category, UUnet held onto first place, with the previously unrated phone companies in second. MindSpring popped up in third place, closely followed by previous second-place holder, AT&T.

UUnet walked away with top honors in competence and knowledge of its customer service and technical support staff. New addition MindSpring came in second, and the phone companies, AT&T and GTE Internetworking tied three ways for third.

In the price category, MindSpring led the pack, with 70 percent satisfied with pricing for the level of service required. The next-best competitor, the phone companies, had only a 51 percent satisfaction rating. The number of respondents satisfied with UUnet's pricing actually rose in the final analysis, but that brought it only to third place. MindSpring seems to have found a formula for offering excellent service at very competitive prices, which puts it in a strong position with price-sensitive small businesses.

So, who really provides businesses with Internet access? Hundreds of different ISPs were listed by respondents as their primary access providers. Small ISPs made up almost half of responses. AT&T boasts the largest single share of survey respondents, at 8.1 percent. MCI holds 6.1 percent of respondents' primary access business. Despite low quality ratings, America Online Inc. (www.aol.com) matched MCI's share with 6.1 percent. Netcom On-Line Communication Services Inc. (www.netcom.com) took a 5.9 percent share, and the overall quality leader, UUnet, came in fifth with 4.8 percent of respondents.

Businesses have identified differences in the quality of service, but, as of fall 1997, there were many customers that remained with their primary ISP despite high dissatisfaction ratings.

Several factors cause such inertia. Foremost is that the market continues to change very rapidly. ISPs are merging, joining alliances or being acquired at a fast clip. Quality of service increases and decreases with technology change on the network and with popularity of the ISP. Once a business decides to switch service providers, there may be contractual issues, employee training or -- a real thorn -- Internet Protocol addressing, which make it difficult to actually make the switch. Nevertheless, TeleChoice (www.telechoice.com) expects to see businesses migrate toward the ISPs offering high service quality in the 1998 study.