Also in this special report:

The future and the electronic consumer p. 26

Why haven’t people rushed to shop on the Internet? p. 27

Kiosks have strong potential, still evolving p. 31

Web sites about creativity, not technology p. 32

Little guys lost in the crowd p. 32

Many of the companies which led the race to provide Internet access are finding a traffic jam on the information highway.

With so many suppliers entering the market – particularly the large telephone, cable, and computer companies – Internet service providers, or isps, no longer enjoy the freedom of the open road.

isps hoping to survive must now compete on the basis of customer service and value-added features to differentiate themselves from the competition.

An isp is a company that sells access to the Internet, usually by the hour.

They offer two main types of connections: dial-up service, used primarily by home users, and dedicated line service, used mainly by companies requiring full-time access to the Internet.

Because many of the original Internet providers were small, local operations, often run out of people’s homes or tiny offices, they were able to provide only dial-up service, and they offered the service only to surrounding areas.

‘Traditionally,’ explains Mike Kologinski of Netcom Canada, ‘the smaller isps have tended to compete on a price basis and certainly not on service; they are often thinly staffed, not well trained, and don’t have many access lines – busy signals are often encountered.’

Kologinski says as the market competition heats up the price of isps will come down and the consumer will no longer need to make that quality trade-off.

Already, the prices offered by the various companies are starting to fall into line with each other.

Finding roughly the same pricing structures across the board, consumers are looking for what else the company can provide besides hours on the Internet.

Widescale availability is important, not only for providing access to more customers in more communities, but also for allowing travelling users to connect to the network while they’re on the road.

Netcom offers servers in eight Canadian cities, with plans to reach 18 by the end of May.

Netcom is the Canadian subsidiary of San Jose, Calif.-based Netcom Online Communications Services, which has 300,000 customers in the u.s.

Twenty per cent of Netcom’s u.s. revenue comes from business clients with dedicated lines.

Though Netcom Canada plans to add business services to its portfolio later in the year, the company is currently targeting home and small-office users with its dial-up service.

Being a subsidiary of an American company, says Kologinski, it is important that his company not just offer the American version of its navigation software, NetCruiser.

The interface accessible by Canadian customers has therefore been Canadianized and offers Canadian content in the form of hotlinks to popular Canadian sites as well as other adjustments like Canadian spelling, and billing in Canadian dollars.

Like most isps, Netcom’s advertising is restricted mainly to print ads in technology publications and in the technology supplements in some daily newspapers, such as The Toronto Star’s Fast Forward section.

Fortunately for Netcom Canada, says Kologinski, there is a lot of spillover from the extensive advertising the company’s u.s. parent places in the big, high-tech publications like PC World.

CompuServe, one of the largest on-line service providers in the world, with four million members worldwide, advertises its services using print and direct mail in Canada, and is looking into broadcast advertising, which has been successful for CompuServe in the u.s, says Julie Fasone, marketing manager, Canada.

She says CompuServe’s point of difference lies in the vast array of information services it can offer in addition to World Wide Web access. These include real-time chat lines, newsgroups, updates on worldwide news, weather and sports, electronic shopping, finance and travel information, entertainment news and games, and a multitude of research and reference tools.

To allow members access to this wealth of information, the company created the CompuServe Information Manager (cim) interface which, according to Fasone, is updated constantly and provides easy, reliable access.

Because it is a worldwide network, members can also obtain access to their e-mail from almost anywhere in the world. With centralized billing and worldwide support for its members, CompuServe bills itself as the easy to use, one-stop shop for Internet access and services.

CompuServe has 130,000 Canadian subscribers in 15 cities.

It offers dial-up access to all its customers at speeds up to 28.8 Kbps (Kilobytes per second), with faster isdn access (56 Kbps) offered in selected cities.

It is also testing cable access technology, which allows even faster user-network communication.

Utilizing cable technology in Newmarket, Ont., is Rogers Wave, a division of Rogers Cablesystems.

Approximately 400 individual subscribers in Newmarket as well as 40 schools in some major Ontario centres are taking advantage of high speed, constant access to the Internet through two-way cable.

David Samuel, president of Rogers Wave, says providing Internet capabilities is ‘a new way of doing business for cable companies because they were always focused on one-way broadcasts of television signals.’

Rogers differentiates its service from its competitors by offering faster speeds and constant ‘connectivity,’ says Samuel.

Unlike a telephone connection where the user needs to dial a server to establish a connection, cable offers a constant connection, accessible immediately.

Samuel says Rogers Wave, which was launched last November, is a viable, revenue-generating business and not just a test site.

He says Rogers plans to expand to other communities, one at a time, as well as to more than 600 Ontario schools.

Making Internet access available to smaller communities will depend on the aggressiveness of local cable operators, says Samuel.

‘Telephone companies have the distinct advantage of having being in the two-way business for a hundred years, so they have been able to push out and reach remote communities. With cable, this will take time,’ he says.

Director of marketing for iSTAR Internet, Chuck Mora, says that the entry of cable and telephone companies into the marketplace has not intimidated many isps. In fact, he says, they have helped legitimize the Internet to technology skeptics.

iSTAR offers home-based dial-up accounts, corporate direct connections, and a full suite of consulting services including security solutions, network architecture and Web site development.

With its ‘no busy signal’ policy, Mora says iSTAR is answering the frustrations associated with not being able to establish a connection.

The company serves 40,000 home users in 30 cities in Canada, though Mora was unable to confirm the number of corporate accounts.

Mora says iSTAR’s Internet Navigator software is easy to preconfigure, install and use.

Its True North Web site offers reviews of some of the best Web sites to guide its users on the Internet.

Sympatico, marketed in Ontario and Quebec by Bell Global Solutions, a subsidiary of Bell Canada, stresses its wide variety of Internet services through extensive print advertising in technology publications and daily newspapers as well as transit advertising, according to Irene Shimoda, communications manager in marketing at Bell Global Solutions.

Sympatico adds value by having its own home page in English and French, providing extensive services, and offering ease of use.

Subscribers can order a starter kit, which includes 50 free hours on the Internet for the first month, through a 1-800 number.

Targeting those not already on the Internet and those not technology-savvy, the kit is easy to start-up and use, says Shimoda.

Bilingual 1-800 support is also a feature of the package.

Sympatico has over 10,000 members in Ontario and Quebec and offers subscribers a host of online services plus value-added contests and special events.

Competition fostered by the entry of all of these companies, says Samuel of Rogers Wave, will no doubt increase the market for Internet services.

‘The ultimate beneficiary will be the consumers who are going to have more choices,’ he says.