ARN

ISP Q&A: Internet filter trial participant, Highway 1

ARN speaks to Highway 1 about participating in the Internet filter trial, the NBN, and reseller opportunities

The Federal Government’s Internet filter trial was rife with controversy and as an ISP participant, Highway 1 was right in the thick of it. With the trial now over, Highway 1 general manager, Nicholas Power, spoke to ARN about the ISP’s current stance on an Internet clean feed, his 2010 predictions and the company’s opportunity for resellers.

What is your company's background?

Nicholas Power (NP): Highway 1 launched in 1994 as an Internet provider in Perth and then expanded into greater Western Australian region. Our primary market is SOHO, SME and enterprise customers requiring broadband DSL, Ethernet and co-location. We differentiate ourselves by having a strong focus on customer service and a commitment to service level agreements in everything we deliver. We are still a relatively small ISP by national standards with less than 5000 customers; however, the majority have a number of high-value premium services with us such as multiple DSLs, MPLS and Ethernet networks.

In 2007, Highway 1 was acquired by the diversified IT group, ZettaServe, which provided us an the opportunity to reinvent the business. With its significant capital injection, we have been able to expand our services to the East Coast, establish a national MPLS network, and implement a new management and support structure. We have since refocused on our core offering, which is the provision of integrated connectivity solutions.

What are your predictions for the ISP market in the next 12 months – do you forecast any big changes?

NP: Over the next 12 months, we see continued consolidation in the ISP market. The residential market will be dominated by the big three. ISPs, like any other business, need to focus on their core markets and continually bring out new products at a service level and price that remains competitive.

The introduction of the Pipe PPC-1 will increase the available international bandwidth in the market and we’ve already seen this driving down prices in this space. We expect this to translate into higher data quotas for customers. I’m unsure if the possible acquisition of Pipe by SP Telemedia (Soul/TPG) will affect Pipe’s aggressive expansion into this area. Cloud services are also something we see as being a big part of the ISP market going forward. We’ll be focusing on leveraging our connectivity to customers and our datacentre space to offer and resell cloud hosting, utility computing and virtual servers.

What is your stance on ISP content filtering?

NP: We were one of the unexpected participants of the trial and it was an interesting process. Our intention for participating was to find out more but in reality, this did not eventuate. We found it to be as much of a black box as those people on the outside, who were asking us questions. The idea that ISPs should police their users is something we are against. As a smaller ISP, we’ve seen the significant cost required just to implement a trial. In the end, I don’t think this is a technical race that can be won.

What impact to you foresee the National Broadband Network (NBN) having on your company?

NP: This is very exciting for us, although I still think it is some time away. I see this as a great opportunity to get access to a national wholesale network with unprecedented coverage and speed. The focus for consumer offerings will shift towards rich content and businesses will be after completely integrated solutions.

Do you believe ISPs should be held legally accountable for what their customers share over the Internet?

NP: No, ISPs should not be held legally accountable. As has been mentioned in previous Q&As, drawing a comparison to misuse on telephony networks is very apt. Effectively, ISPs are only a conduit.

Page Break

Please explain the opportunities you have for resellers.

NP: We operate three channel programs designed for the small end of the IT market. Most of our resellers are small retail computer stores and IT businesses. We refer to our resellers as partners as we aim to work alongside them in providing Highway 1 solutions to their customers. Our channel offerings differ from our competitors because in most cases, there are no upfront minimum commitments required to join the specific program. This enables resellers to receive additional revenue streams without adding cost to their business.

Our three programs are:

a) Accelerator – This program is designed for the retail computer store and small onsite computer consulting business. We provide a reoccurring monthly margin for broadband DSL, SHDSL and co-location products. Partners can manage their customer’s account using the Highway 1 Partner Portal. This enables partners to view all upcoming and past payments, update bank details and order sales material. With proper customer consent, partners can also manage the customer’s connection (traffic statistics, passwords, authentication history). Partners can also choose to have their own co-branded signup page by uploading their logo to the site.

b) VISP – The Virtual Internet Service Provider program is designed for businesses that wish to sell Internet services using their own brand but do not want to own or operate any network infrastructure. This enables the VISP to offer Internet services without high start-up costs or experienced network personnel. Highway 1 provides an end-to-end service where we assist the partner in developing plans (DSL1, DSL2+, Naked DSL) and provide them with access to our online portal tools to manage and grow their customer base. What's best is that it is all delivered as the Partner’s own brand.

c) Wholesale - Highway 1's Wholesale Access Network (WNA) program is designed for service providers who wish to deliver their own Internet services and manage their network infrastructure and capacity. As a wholesaler, they have access to a range of last-mile connectivity options including dial-up, broadband (ADSL, ADSL2+, Naked and Phone Bundles), SHDSL, Metro Ethernet and 3G wireless. Wholesalers also have complete control over the solutions and the service levels they deliver to their end customers.

What additional opportunities do you see for resellers who want to use your products?

NP: The opportunity is huge, especially with the development of online tools to manage and track sales, ongoing revenue and support, should they want to take advantage of it.

What are some of the challenges they should be aware of?

NP: It is a tough market to get new customers. Begin by selling into their existing customer base as they are a great source.

What are some of the key focuses for your company over the next year? Our key focuses will be:

  • Cloud hosting and on-demand computing;
  • Our new CityEthernet, MetroEthernet and MPLS product lines;
  • Expanding our Channel, VISP and wholesale partners.