1 00:00:04,400 --> 00:00:07,800 Speaker 1: Welcome to tech Stuff, a production from I Heart Radio. 2 00:00:12,320 --> 00:00:15,239 Speaker 1: Hey there, and welcome to tech Stuff. I'm your host, 3 00:00:15,400 --> 00:00:18,479 Speaker 1: Jonathan Strickland. I'm an executive producer with iHeart Radio and 4 00:00:18,480 --> 00:00:21,840 Speaker 1: I love all things tech. And previously on tech Stuff, 5 00:00:22,360 --> 00:00:26,120 Speaker 1: Wait now that that doesn't sound hang on what Previously 6 00:00:26,680 --> 00:00:30,600 Speaker 1: on tech Stuff we covered the origins of the Internet 7 00:00:30,640 --> 00:00:34,479 Speaker 1: service provider earth Link. I talked about how Sky Dayton 8 00:00:34,680 --> 00:00:38,479 Speaker 1: founded the company, which started off with ten modems that 9 00:00:38,479 --> 00:00:41,519 Speaker 1: would connect customers with the Internet at large dial up 10 00:00:42,120 --> 00:00:45,000 Speaker 1: modem systems is what we're talking about here, and then 11 00:00:45,040 --> 00:00:47,919 Speaker 1: how Dayton and his team grew that business by partnering 12 00:00:47,960 --> 00:00:52,479 Speaker 1: with other companies to expand service. Earth Link least capacities 13 00:00:52,560 --> 00:00:57,160 Speaker 1: from companies like credit card verification Services and other I 14 00:00:57,400 --> 00:01:01,160 Speaker 1: s p s to reach across the United States and 15 00:01:01,160 --> 00:01:05,920 Speaker 1: then eventually into Canada and then beyond. Now along the way, 16 00:01:06,120 --> 00:01:10,039 Speaker 1: Sky would step down as CEO. He handed control over 17 00:01:10,080 --> 00:01:13,600 Speaker 1: to Gary Betty, while Dayton would stay on as chairman 18 00:01:13,600 --> 00:01:16,080 Speaker 1: of the board. For a while longer. Earth Link made 19 00:01:16,120 --> 00:01:19,000 Speaker 1: several acquisitions. They bought up a lot of regional, small 20 00:01:19,080 --> 00:01:21,240 Speaker 1: I s p s and they grew as a result, 21 00:01:21,319 --> 00:01:25,000 Speaker 1: until in nine the company announced it was going to 22 00:01:25,080 --> 00:01:29,720 Speaker 1: merge with another company, mind Spring, which was a rival 23 00:01:29,760 --> 00:01:34,000 Speaker 1: I SP located out of Atlanta, Georgia, my hometown, And 24 00:01:34,080 --> 00:01:36,880 Speaker 1: in two thousand those two companies became one, and the 25 00:01:36,880 --> 00:01:39,679 Speaker 1: merger meant that the new version of earth Link was 26 00:01:39,760 --> 00:01:42,120 Speaker 1: the second largest I s P in America at that point, 27 00:01:42,640 --> 00:01:46,880 Speaker 1: behind America Online. Uh, America Online actually had a pretty 28 00:01:46,920 --> 00:01:51,760 Speaker 1: significant head start in the consumer market. Now, one thing 29 00:01:51,800 --> 00:01:55,680 Speaker 1: I should clarify is that balance of customers, because often 30 00:01:55,720 --> 00:01:58,080 Speaker 1: I find myself thinking of I s p s from 31 00:01:58,120 --> 00:02:02,360 Speaker 1: a household customer perspective, because I mean I am I 32 00:02:02,400 --> 00:02:05,080 Speaker 1: am an I s P customer like a household customer, 33 00:02:05,320 --> 00:02:07,600 Speaker 1: and I'm not actually running a business like that. But 34 00:02:08,000 --> 00:02:12,200 Speaker 1: obviously a lot of I s P customers are actually businesses, 35 00:02:12,320 --> 00:02:16,720 Speaker 1: not consumers, not individuals. And earth Link was a leading 36 00:02:16,840 --> 00:02:20,160 Speaker 1: I s P for enterprise customers, meaning earth Link had 37 00:02:20,240 --> 00:02:23,760 Speaker 1: a lot of businesses as their clients. And when you 38 00:02:23,800 --> 00:02:26,560 Speaker 1: look at the consumer market, there were other companies that 39 00:02:26,560 --> 00:02:30,280 Speaker 1: were performing much better in that market, like the aforementioned 40 00:02:30,320 --> 00:02:34,079 Speaker 1: America Online as well as Prodigy, which, like America Online, 41 00:02:34,160 --> 00:02:38,320 Speaker 1: had begun as an online service provider, which is not 42 00:02:38,440 --> 00:02:40,959 Speaker 1: the same thing as an I s P. It's sort 43 00:02:40,960 --> 00:02:44,840 Speaker 1: of a walled garden network. It's not access to the 44 00:02:44,840 --> 00:02:47,720 Speaker 1: Internet at large, but they had also transitioned from that 45 00:02:47,880 --> 00:02:52,919 Speaker 1: to an Internet service provider. By two thousand, America Online 46 00:02:52,960 --> 00:02:57,800 Speaker 1: had twenty million subscribers, largely because a o L was 47 00:02:57,960 --> 00:03:01,480 Speaker 1: sending out installation CDs like they were nothing. I mean, 48 00:03:01,480 --> 00:03:04,480 Speaker 1: if you were back around those days, like if you 49 00:03:04,520 --> 00:03:08,720 Speaker 1: were checking your mail, you probably made a few jokes 50 00:03:08,720 --> 00:03:11,079 Speaker 1: about turning a O L c d s into drink 51 00:03:11,120 --> 00:03:15,160 Speaker 1: coasters or a mobile for your kid or something, because 52 00:03:15,200 --> 00:03:16,760 Speaker 1: it seemed like you would get a couple in the 53 00:03:16,760 --> 00:03:19,679 Speaker 1: mail every week or so. But that kind of strategy 54 00:03:19,800 --> 00:03:22,200 Speaker 1: was actually working, as a o L had around those 55 00:03:22,280 --> 00:03:26,960 Speaker 1: twenty million customers. Earth Link, by contrast, had slightly fewer 56 00:03:27,000 --> 00:03:30,519 Speaker 1: than five million customers, so yeah, there's like a fifteen 57 00:03:30,560 --> 00:03:33,320 Speaker 1: million person gap there. But earth Link also had a 58 00:03:33,400 --> 00:03:37,200 Speaker 1: huge number of enterprise customers, so the company was doing 59 00:03:37,400 --> 00:03:41,200 Speaker 1: pretty well from a financial perspective, at least as far 60 00:03:41,200 --> 00:03:44,080 Speaker 1: as revenue. When it came to profit, not so much, 61 00:03:44,120 --> 00:03:46,480 Speaker 1: but that's because earth Link was pouring a lot of 62 00:03:46,480 --> 00:03:50,840 Speaker 1: that money into acquiring other companies and growing, so it 63 00:03:50,920 --> 00:03:53,560 Speaker 1: was kind of a growth engine. But not a profit 64 00:03:53,640 --> 00:03:56,760 Speaker 1: engine at this point. Now, something else was going on 65 00:03:56,920 --> 00:03:59,880 Speaker 1: in the technological world while earth Link was growing. So 66 00:04:00,000 --> 00:04:02,360 Speaker 1: we're gonna be doing some backtracking in this episode because 67 00:04:02,360 --> 00:04:05,240 Speaker 1: there was stuff that I guess technically I could have 68 00:04:05,280 --> 00:04:07,440 Speaker 1: covered in part one, but I really wanted to get 69 00:04:07,440 --> 00:04:10,520 Speaker 1: to that that description of how earth Link and MindSpring 70 00:04:10,560 --> 00:04:15,080 Speaker 1: would become the earth Link of the future. But uh, 71 00:04:15,200 --> 00:04:17,000 Speaker 1: the thing that we want to go back to right 72 00:04:17,040 --> 00:04:20,760 Speaker 1: now is the ascension of other technologies that allowed for 73 00:04:21,240 --> 00:04:25,680 Speaker 1: internet broadband connectivity, because not only would it create alternatives 74 00:04:25,720 --> 00:04:30,119 Speaker 1: to dial up, it also was tied into what would 75 00:04:30,120 --> 00:04:35,200 Speaker 1: become the major competitor and ultimately the death knell for 76 00:04:35,240 --> 00:04:38,760 Speaker 1: a lot of internet service providers. So earth Link launched 77 00:04:38,800 --> 00:04:41,159 Speaker 1: in the dial up modeme era as it was passing 78 00:04:41,160 --> 00:04:45,360 Speaker 1: its peak. So dial up was starting to get to 79 00:04:46,920 --> 00:04:49,960 Speaker 1: the best, the most that it's ever been, and then 80 00:04:50,000 --> 00:04:53,920 Speaker 1: it was very slowly starting to decline. Now, dial up 81 00:04:53,920 --> 00:04:56,400 Speaker 1: modems are still very much a thing. They're not gone. 82 00:04:56,720 --> 00:04:59,160 Speaker 1: They exist to this day. So when I talk about 83 00:04:59,160 --> 00:05:01,159 Speaker 1: a dial up era, um, I really mean the period 84 00:05:01,240 --> 00:05:05,039 Speaker 1: in which that technology was the dominant one. Also, when 85 00:05:05,040 --> 00:05:08,360 Speaker 1: Earthlink launched a state of the art consumer modem which 86 00:05:08,360 --> 00:05:11,040 Speaker 1: gets you the blistering speed of twenty eight point eight 87 00:05:11,120 --> 00:05:15,320 Speaker 1: killabits per second. But around the corner was the emergence 88 00:05:15,360 --> 00:05:19,240 Speaker 1: of fifty six kilabits per second modems. Still, other technologies 89 00:05:19,240 --> 00:05:21,400 Speaker 1: would enter the fray and change things, and we were 90 00:05:21,440 --> 00:05:24,440 Speaker 1: about to enter the era of broadband. Now, anyone who 91 00:05:24,560 --> 00:05:27,080 Speaker 1: used an old dial up modem to do something like 92 00:05:27,200 --> 00:05:29,720 Speaker 1: load up a web page knows that it could be 93 00:05:29,760 --> 00:05:34,000 Speaker 1: painstakingly slow. If you had a twenty eight point eight 94 00:05:34,040 --> 00:05:38,080 Speaker 1: killabits per second modem and you wanted to log into 95 00:05:38,160 --> 00:05:41,960 Speaker 1: a page that had two of images and other stuff 96 00:05:41,960 --> 00:05:44,520 Speaker 1: in it, it would take more than a minute for 97 00:05:44,600 --> 00:05:47,919 Speaker 1: that web page to load on your browser, and a 98 00:05:47,960 --> 00:05:50,840 Speaker 1: lot of early web pages went sparingly on images for 99 00:05:50,880 --> 00:05:54,000 Speaker 1: that reason. So let's say you wanted to do something 100 00:05:54,000 --> 00:05:57,200 Speaker 1: even more intensive, like you wanted to download an MP 101 00:05:57,360 --> 00:05:59,920 Speaker 1: three a song, And for the sake of this exam, 102 00:06:00,080 --> 00:06:02,360 Speaker 1: well we'll say it's an MP three of a song 103 00:06:02,440 --> 00:06:05,960 Speaker 1: that's five megabytes in size. Now, over a twenty eight 104 00:06:06,000 --> 00:06:08,560 Speaker 1: point eight kill abits per second modem, that would take 105 00:06:08,560 --> 00:06:13,120 Speaker 1: you about half an hour to download one song. And 106 00:06:13,200 --> 00:06:16,279 Speaker 1: this was the top of the line modem when earth 107 00:06:16,320 --> 00:06:19,040 Speaker 1: Link was launching, and a lot of people were actually 108 00:06:19,080 --> 00:06:22,880 Speaker 1: using modems that had much lower data transfer rates. Even 109 00:06:22,880 --> 00:06:25,400 Speaker 1: when we'd get up to fifty six killa bits per second, 110 00:06:25,440 --> 00:06:28,479 Speaker 1: you'd still be talking about waiting almost fifteen minutes to 111 00:06:28,560 --> 00:06:31,920 Speaker 1: download a single song, and the whole time you're taking 112 00:06:31,960 --> 00:06:35,039 Speaker 1: up a phone line. So some folks like my parents 113 00:06:35,320 --> 00:06:38,960 Speaker 1: would arrange to have a separate phone line specifically for 114 00:06:39,000 --> 00:06:41,960 Speaker 1: the computer modem, which was a good idea because if 115 00:06:41,960 --> 00:06:44,640 Speaker 1: you were using a shared line and somewhere somewhere else 116 00:06:44,680 --> 00:06:47,200 Speaker 1: in the house picked up a phone, it would interrupt 117 00:06:47,240 --> 00:06:50,400 Speaker 1: your connection and you would have to reset, and if 118 00:06:50,400 --> 00:06:52,520 Speaker 1: you were in the middle of a file transfer, you 119 00:06:52,560 --> 00:06:55,640 Speaker 1: might have to start all over again. But as I mentioned, 120 00:06:55,720 --> 00:06:58,600 Speaker 1: there were other technologies that were poised to keep things 121 00:06:58,640 --> 00:07:01,440 Speaker 1: moving along at a faster pace, and one of them 122 00:07:01,720 --> 00:07:04,040 Speaker 1: was a tech that had been in development more as 123 00:07:04,080 --> 00:07:09,160 Speaker 1: a method of allowing telephone companies to compete with cable companies, 124 00:07:09,400 --> 00:07:13,360 Speaker 1: not necessarily in the internet space, but in the providing 125 00:07:13,640 --> 00:07:17,120 Speaker 1: of video type space. So this is going to get 126 00:07:17,120 --> 00:07:19,880 Speaker 1: a bit technical, but stick with me. We need a 127 00:07:20,000 --> 00:07:23,360 Speaker 1: super quick history of cable television, and I'll be specifically 128 00:07:23,400 --> 00:07:26,640 Speaker 1: talking about coaxial cable, though you should know there's also 129 00:07:26,920 --> 00:07:30,360 Speaker 1: fiber optic cable, but that would come much later. Coax 130 00:07:30,480 --> 00:07:33,880 Speaker 1: cable essentially started in the nineteen forties with people who 131 00:07:33,920 --> 00:07:37,000 Speaker 1: couldn't get a broadcast signal at their homes because they 132 00:07:37,000 --> 00:07:40,880 Speaker 1: were just too far away from the center of broadcast 133 00:07:41,000 --> 00:07:44,120 Speaker 1: and the antennas that they were using weren't picking up 134 00:07:44,160 --> 00:07:46,560 Speaker 1: a strong enough signal for them to see anything. So 135 00:07:46,600 --> 00:07:51,080 Speaker 1: they began to erect antennas in strategic locations, like at 136 00:07:51,080 --> 00:07:53,600 Speaker 1: the top of a hill, and then they would run 137 00:07:53,760 --> 00:07:57,320 Speaker 1: cable from the antennas down to the televisions in the 138 00:07:57,360 --> 00:08:01,560 Speaker 1: nearby neighborhoods. Uh. There were enterprising individuals who did this 139 00:08:01,600 --> 00:08:03,440 Speaker 1: and set it up as a business. And so their 140 00:08:03,480 --> 00:08:06,800 Speaker 1: business was that they would build the antenna and then 141 00:08:06,840 --> 00:08:09,240 Speaker 1: you would pay them for them to run cable from 142 00:08:09,280 --> 00:08:11,840 Speaker 1: the antenna down to your home. And this was called 143 00:08:11,960 --> 00:08:17,680 Speaker 1: community antenna television or ce A TV. That was the 144 00:08:17,720 --> 00:08:21,000 Speaker 1: birth of cable television. People discovered that the cable signal 145 00:08:21,160 --> 00:08:24,440 Speaker 1: would weaken the further it has to travel. So if 146 00:08:24,480 --> 00:08:27,480 Speaker 1: you lived a far distance from that hill where the 147 00:08:27,520 --> 00:08:31,320 Speaker 1: antenna was, and you just ran cable from the antenna 148 00:08:31,360 --> 00:08:34,120 Speaker 1: to the TV you still might not get something that 149 00:08:34,240 --> 00:08:38,400 Speaker 1: is watchable, but you could put in amplifiers so the 150 00:08:38,440 --> 00:08:41,640 Speaker 1: signal would come into the amplifier. The amplifier would boost 151 00:08:41,679 --> 00:08:45,320 Speaker 1: the signal and push it further down the line towards 152 00:08:45,360 --> 00:08:49,600 Speaker 1: the televisions. You might have several amplifiers on a single line. However, 153 00:08:49,640 --> 00:08:53,559 Speaker 1: amplifiers could also introduce noise into the signal, and thus 154 00:08:53,640 --> 00:08:56,520 Speaker 1: that could get boosted as well. And cable systems weren't 155 00:08:56,679 --> 00:09:01,080 Speaker 1: terribly reliable, so they weren't incredibly popular. They were just 156 00:09:01,160 --> 00:09:04,559 Speaker 1: seen as the only alternative to no television at all 157 00:09:04,600 --> 00:09:06,720 Speaker 1: if you happen to live outside of a broadcast area, 158 00:09:07,240 --> 00:09:09,600 Speaker 1: so they were better than nothing. But it wasn't until 159 00:09:09,640 --> 00:09:13,520 Speaker 1: the nineteen seventies that advancements in technology and process would 160 00:09:13,520 --> 00:09:16,440 Speaker 1: improve the experience and cable companies the way we know 161 00:09:16,520 --> 00:09:21,600 Speaker 1: them today would become viable. The coaxial cable is an 162 00:09:21,640 --> 00:09:24,200 Speaker 1: important part of this. If you were able to see 163 00:09:24,200 --> 00:09:27,280 Speaker 1: the layers in a coaxial cable, you would see that 164 00:09:27,360 --> 00:09:30,360 Speaker 1: at the very core of it, there is a conductive material, 165 00:09:30,520 --> 00:09:34,760 Speaker 1: copper wire. Surrounding that copper wire is a layer of 166 00:09:34,840 --> 00:09:39,920 Speaker 1: dielectric insulating material, and surrounding that is an outer conductor 167 00:09:40,080 --> 00:09:43,360 Speaker 1: called the shield. So the outer and inner conductor are 168 00:09:43,400 --> 00:09:46,719 Speaker 1: both aligned in the same direction, along the same axis. 169 00:09:47,240 --> 00:09:50,880 Speaker 1: Think of a small straw nestled inside a larger straw, 170 00:09:51,120 --> 00:09:54,200 Speaker 1: and that's why it's called a coaxial cable because they're 171 00:09:54,200 --> 00:09:58,520 Speaker 1: both along the same axis. Information travels through coaxial cables 172 00:09:58,559 --> 00:10:03,079 Speaker 1: along a carrier way, which then is modulated. You can 173 00:10:03,120 --> 00:10:05,520 Speaker 1: modulate it by its amplitude, by its frequency, and by 174 00:10:05,520 --> 00:10:09,559 Speaker 1: its phase. This gets into the electromagnetic spectrum, which is 175 00:10:09,600 --> 00:10:13,360 Speaker 1: the range of all types of electromagnetic radiation. From super 176 00:10:13,480 --> 00:10:17,319 Speaker 1: long radio waves that are miles and miles long two 177 00:10:17,440 --> 00:10:21,440 Speaker 1: super short gamma rays. We can describe these waves in 178 00:10:21,559 --> 00:10:25,160 Speaker 1: terms of wavelength, how long those waves are, or frequency. 179 00:10:25,360 --> 00:10:28,240 Speaker 1: Frequency refers to the number of wavelengths that pass a 180 00:10:28,280 --> 00:10:31,920 Speaker 1: given point within a second. We measure frequency and hurts, 181 00:10:32,120 --> 00:10:36,200 Speaker 1: with one hurts being one wave per second. Okay, so 182 00:10:36,240 --> 00:10:40,680 Speaker 1: how does cable TV send all those channels of content simultaneously? 183 00:10:40,800 --> 00:10:43,760 Speaker 1: How come they don't all get mixed up? Well, the 184 00:10:43,760 --> 00:10:47,240 Speaker 1: word channel is the key. A channel is actually a 185 00:10:47,360 --> 00:10:52,720 Speaker 1: band of frequencies that is reserved to a specific television 186 00:10:52,840 --> 00:10:56,920 Speaker 1: source like MTV. I mean, why not MTV I want 187 00:10:57,000 --> 00:11:01,240 Speaker 1: my MTV. So in the US, AT channel consists of 188 00:11:01,320 --> 00:11:06,640 Speaker 1: a bandwidth of spectrum within that that cable. You know, 189 00:11:06,679 --> 00:11:12,240 Speaker 1: the cable can hold a certain spectrum of frequencies. Well, 190 00:11:12,520 --> 00:11:14,960 Speaker 1: a channel is a bandwidth of six mega hurts, so 191 00:11:15,000 --> 00:11:19,080 Speaker 1: it's six mega hurts wide across the available spectrum that 192 00:11:19,160 --> 00:11:22,000 Speaker 1: the cable can carry. And within that six mega hurts 193 00:11:22,080 --> 00:11:25,720 Speaker 1: band is all the information of that specific channel of television. 194 00:11:25,800 --> 00:11:29,280 Speaker 1: That six mega hurts belongs to MTV. But you move 195 00:11:29,360 --> 00:11:33,679 Speaker 1: over another six mega hurts to the next band, and 196 00:11:33,720 --> 00:11:36,480 Speaker 1: you're at a different channel, and your cable box acts 197 00:11:36,520 --> 00:11:41,360 Speaker 1: as a tuner. It switches over to accept signals from 198 00:11:41,400 --> 00:11:44,559 Speaker 1: a specific band of frequencies. So it goes from one 199 00:11:44,600 --> 00:11:48,240 Speaker 1: specific six mega hurts band to tune into whichever channel 200 00:11:48,240 --> 00:11:51,720 Speaker 1: you want to watch. And the capacity of coaxial depends 201 00:11:51,840 --> 00:11:55,439 Speaker 1: on a few factors, but generally we're talking about the 202 00:11:55,480 --> 00:11:58,920 Speaker 1: ability to carry more than one hundred six mega hurts 203 00:11:59,080 --> 00:12:03,559 Speaker 1: channels on analog signals that can travel across a coax cable. Now, 204 00:12:03,600 --> 00:12:06,679 Speaker 1: note I said analog things switch up when you go 205 00:12:06,720 --> 00:12:09,679 Speaker 1: to digital. Now, the reason I went into all of 206 00:12:09,720 --> 00:12:12,559 Speaker 1: that is twofold one is because the telephone companies were 207 00:12:12,640 --> 00:12:17,960 Speaker 1: rather jealous of cable companies. Telephone companies already had wired 208 00:12:18,120 --> 00:12:23,200 Speaker 1: infrastructure laid out across entire countries. If a phone company 209 00:12:23,320 --> 00:12:27,080 Speaker 1: could deliver content the way cable companies did, it would 210 00:12:27,120 --> 00:12:31,760 Speaker 1: represent an enormous jump in revenue. Because remember, once you've 211 00:12:31,800 --> 00:12:34,760 Speaker 1: built out your infrastructure so it so it meets, you know, 212 00:12:35,000 --> 00:12:38,119 Speaker 1: the vast majority of of individuals who could be customers, 213 00:12:38,720 --> 00:12:42,760 Speaker 1: you've hit market saturation. You can't really grow anymore, so 214 00:12:42,840 --> 00:12:48,200 Speaker 1: you have limited ways of increasing your revenue. And we 215 00:12:48,360 --> 00:12:52,760 Speaker 1: typically reward companies that show growth year over year. It's 216 00:12:52,800 --> 00:12:55,240 Speaker 1: not just it's not just good enough to perform well, 217 00:12:55,760 --> 00:12:59,040 Speaker 1: you need to grow. The other reason is that later 218 00:12:59,080 --> 00:13:01,200 Speaker 1: on in the two thousand, we'd see the rise of 219 00:13:01,280 --> 00:13:04,480 Speaker 1: cable internet connectivity, which would make a huge impact on 220 00:13:04,480 --> 00:13:07,800 Speaker 1: the I s P industry. But first let's go back 221 00:13:07,840 --> 00:13:10,720 Speaker 1: over and look at the phone companies. So the telephonic 222 00:13:10,840 --> 00:13:15,360 Speaker 1: infrastructure relied on what are called twisted pair cables, which 223 00:13:15,440 --> 00:13:18,400 Speaker 1: doesn't mean that they're deviant or anything. They're not that 224 00:13:18,480 --> 00:13:22,240 Speaker 1: kind of twisted. They're literally twisted together. This is something 225 00:13:22,240 --> 00:13:24,520 Speaker 1: that dates all the way back to Alexander Graham Bell 226 00:13:24,679 --> 00:13:30,240 Speaker 1: himself twisted pair cables consists of pairs of wires, So 227 00:13:30,280 --> 00:13:33,480 Speaker 1: you get two wires, they form a circuit that's capable 228 00:13:33,480 --> 00:13:37,240 Speaker 1: of transmitting data, and these two wires are twisted together, 229 00:13:37,559 --> 00:13:42,160 Speaker 1: which in turn shields those wires from interference also known 230 00:13:42,200 --> 00:13:45,880 Speaker 1: as cross talk, from other pairs of wires which are 231 00:13:45,920 --> 00:13:48,640 Speaker 1: also twisted, and a cable is made up of lots 232 00:13:48,760 --> 00:13:52,560 Speaker 1: of these twisted pairs, all bundled together. By the nineteen eighties, 233 00:13:52,840 --> 00:13:55,800 Speaker 1: researchers at telephone companies were working hard to figure out 234 00:13:55,840 --> 00:13:59,400 Speaker 1: how to deliver more information over telephone wires in an 235 00:13:59,400 --> 00:14:03,000 Speaker 1: effort to come pete against cable companies. It was possible 236 00:14:03,040 --> 00:14:06,400 Speaker 1: to transmit data like video across these lines. There were 237 00:14:06,440 --> 00:14:11,120 Speaker 1: television studios that we're using twisted pair cables to send 238 00:14:11,200 --> 00:14:15,480 Speaker 1: video from a studio to a broadcast area. But you 239 00:14:15,559 --> 00:14:18,280 Speaker 1: couldn't do it with the same amount of throughput that 240 00:14:18,360 --> 00:14:20,600 Speaker 1: you could manage with cable that twisted wires just couldn't 241 00:14:20,640 --> 00:14:23,400 Speaker 1: carry as much data per unit of time, And a 242 00:14:23,400 --> 00:14:25,920 Speaker 1: big part of the problem was that having the same 243 00:14:25,960 --> 00:14:30,800 Speaker 1: bandwidth for upstream and downstream transmissions, in other words, having 244 00:14:30,920 --> 00:14:34,400 Speaker 1: equal amounts of capacity to send stuff up and to 245 00:14:34,480 --> 00:14:38,480 Speaker 1: bring stuff down would cause problems, and an engineer and 246 00:14:38,560 --> 00:14:43,440 Speaker 1: scientist with Belcore named Joseph lech Lighter would find a 247 00:14:43,480 --> 00:14:47,320 Speaker 1: big breakthrough. Lech Lighter found that if you offset the 248 00:14:47,400 --> 00:14:52,080 Speaker 1: upstream and downstream bandwidth allocation, meaning you'd allow more data 249 00:14:52,120 --> 00:14:54,920 Speaker 1: to travel in one direction versus the other in that 250 00:14:55,000 --> 00:14:58,640 Speaker 1: same amount of time, you could dramatically increase the overall 251 00:14:58,680 --> 00:15:01,720 Speaker 1: amount of information that could travel over those lines. So 252 00:15:02,440 --> 00:15:06,440 Speaker 1: it's called a symmetric meaning the upstream and downstream band 253 00:15:06,440 --> 00:15:10,000 Speaker 1: what's are not symmetrical, and because most users tend to 254 00:15:10,040 --> 00:15:12,960 Speaker 1: pull down more information than they need to upload, the 255 00:15:13,120 --> 00:15:16,720 Speaker 1: downstream side would get the most love, and to this 256 00:15:16,800 --> 00:15:19,640 Speaker 1: day it's pretty common to see a much higher download 257 00:15:20,440 --> 00:15:23,520 Speaker 1: rate than an upload rate, though it's not always about 258 00:15:24,280 --> 00:15:27,440 Speaker 1: the same process that Leclighter found, but that that's not 259 00:15:27,480 --> 00:15:30,200 Speaker 1: really important and it would take about two decades for 260 00:15:30,280 --> 00:15:33,640 Speaker 1: lec Lighter's work to have a real practical application. It 261 00:15:33,640 --> 00:15:37,080 Speaker 1: would be called a d s L for a symmetric 262 00:15:37,240 --> 00:15:41,120 Speaker 1: digital subscriber line. Most of the time we just referred 263 00:15:41,160 --> 00:15:45,560 Speaker 1: to it as DSL A, and not all DSL is asymmetric. 264 00:15:45,640 --> 00:15:48,360 Speaker 1: There's also symmetrical DSL, but a lot of people just 265 00:15:48,520 --> 00:15:52,280 Speaker 1: shorten it to DSL anyway. Now, a DSL connection allowed 266 00:15:52,320 --> 00:15:54,800 Speaker 1: for much greater data transfer rates than what you could 267 00:15:54,840 --> 00:15:58,600 Speaker 1: accomplish with a regular dial up modem. The dial up modems, 268 00:15:58,640 --> 00:16:01,520 Speaker 1: again they maxed out it fifty six bits per second, 269 00:16:01,600 --> 00:16:05,320 Speaker 1: but DSL could reach speeds of more than ten times that, 270 00:16:05,920 --> 00:16:08,840 Speaker 1: and over time, as technology improved, it would reach speeds 271 00:16:08,880 --> 00:16:12,640 Speaker 1: of up to one hundred megabits per second. Now, if 272 00:16:12,640 --> 00:16:15,960 Speaker 1: you listen to my episode about Section two thirty and 273 00:16:15,960 --> 00:16:18,400 Speaker 1: what that's all about, you've heard me talk about the 274 00:16:18,440 --> 00:16:23,280 Speaker 1: Telecommunications Act of If you recall, I mentioned that this 275 00:16:23,320 --> 00:16:26,720 Speaker 1: Act was a truly huge piece of legislation and section 276 00:16:26,760 --> 00:16:29,400 Speaker 1: to thirty is just a tiny, tiny piece of it. 277 00:16:29,960 --> 00:16:32,320 Speaker 1: And Section to thirty, for those who don't know, is 278 00:16:32,360 --> 00:16:36,640 Speaker 1: a passage that grants widespread legal immunity to Internet platforms 279 00:16:36,640 --> 00:16:40,080 Speaker 1: for stuff that people post to those platforms. So, in 280 00:16:40,120 --> 00:16:43,760 Speaker 1: other words, it means that if someone posts illegal content 281 00:16:43,920 --> 00:16:47,520 Speaker 1: on a platform, the platform itself isn't held accountable for 282 00:16:47,600 --> 00:16:50,680 Speaker 1: that act. But Section to thirty was such a tiny 283 00:16:50,840 --> 00:16:53,360 Speaker 1: piece of the overall picture that I think it's safe 284 00:16:53,360 --> 00:16:57,200 Speaker 1: to say most politicians weren't really focusing on it. One 285 00:16:57,240 --> 00:17:00,280 Speaker 1: thing the Act did was open up the possibility for 286 00:17:00,360 --> 00:17:03,280 Speaker 1: both the cable industry and the telephone industry to get 287 00:17:03,320 --> 00:17:07,280 Speaker 1: into the business of being Internet service providers, considering these 288 00:17:07,320 --> 00:17:11,160 Speaker 1: industries already had massive infrastructures built into the fabric of 289 00:17:11,200 --> 00:17:15,080 Speaker 1: the modern society, and that technologies like DSL and cable 290 00:17:15,119 --> 00:17:18,000 Speaker 1: would mean they would eventually be able to offer up 291 00:17:18,119 --> 00:17:20,480 Speaker 1: faster service than dial up I s p s could. 292 00:17:20,800 --> 00:17:23,040 Speaker 1: It would mean that there would be some fierce competition 293 00:17:23,119 --> 00:17:27,520 Speaker 1: in the space, and that companies that were once bulletproof, 294 00:17:27,600 --> 00:17:29,920 Speaker 1: like America Online and earth Link would have a more 295 00:17:30,000 --> 00:17:33,280 Speaker 1: uncertain future. When we come back, I'll talk about how 296 00:17:33,320 --> 00:17:35,360 Speaker 1: all this would converge and what would happen to earth 297 00:17:35,400 --> 00:17:38,480 Speaker 1: Link in the meantime, But first let's take a quick break. 298 00:17:45,920 --> 00:17:49,520 Speaker 1: So throughout the nineties, as telephone and cable companies worked 299 00:17:49,560 --> 00:17:52,720 Speaker 1: to create an economically feasible means of entering the I 300 00:17:53,000 --> 00:17:55,080 Speaker 1: s P industry now that they had the green light 301 00:17:55,119 --> 00:17:58,560 Speaker 1: to do so from the US government, dial up remained 302 00:17:58,640 --> 00:18:01,920 Speaker 1: the primary way most people were connecting to the Internet, 303 00:18:01,960 --> 00:18:04,760 Speaker 1: and companies like earth Link we're doing well, but there 304 00:18:04,840 --> 00:18:07,520 Speaker 1: was a ticking clock element going on. No one was 305 00:18:07,600 --> 00:18:10,320 Speaker 1: certain when the broadband era would really take over from 306 00:18:10,359 --> 00:18:13,119 Speaker 1: dial up, but it seemed pretty much a guarantee that 307 00:18:13,119 --> 00:18:16,000 Speaker 1: that is what was going to happen. But in those 308 00:18:16,000 --> 00:18:18,880 Speaker 1: intervening years, earth Link kept making big moves. So back 309 00:18:18,880 --> 00:18:22,040 Speaker 1: in the nineties before the mind Spring merger, earth Link 310 00:18:22,080 --> 00:18:25,600 Speaker 1: continued to make strategic partnerships with companies like sign Net 311 00:18:25,760 --> 00:18:28,960 Speaker 1: or p s i Net, another early I s P 312 00:18:29,520 --> 00:18:33,120 Speaker 1: to provide access to more of North America, including Canada, 313 00:18:33,280 --> 00:18:36,280 Speaker 1: and it also signed a deal with Microsoft. Earth Link 314 00:18:36,320 --> 00:18:40,440 Speaker 1: would provide customers with the company's browser Internet Explorer, much 315 00:18:40,480 --> 00:18:44,240 Speaker 1: as they had done with Netscape Navigator earlier. In return, 316 00:18:44,320 --> 00:18:47,240 Speaker 1: Microsoft included earth Link in a suite of pre installed 317 00:18:47,280 --> 00:18:51,479 Speaker 1: applications on Windows and I cannot stress to you how 318 00:18:51,560 --> 00:18:56,359 Speaker 1: valuable that would be for a company to have your app, 319 00:18:56,640 --> 00:19:02,399 Speaker 1: your portal to your service in looted as a native 320 00:19:02,480 --> 00:19:06,520 Speaker 1: application on the most popular operating system in the world. 321 00:19:07,160 --> 00:19:11,000 Speaker 1: It is beyond valuable. Earth Link also began to offer 322 00:19:11,080 --> 00:19:13,199 Speaker 1: I S d N service. Now, this was sort of 323 00:19:13,200 --> 00:19:16,240 Speaker 1: a step between the normal phone lines being used with 324 00:19:16,280 --> 00:19:21,320 Speaker 1: modems and the upcoming DSL lines. It provided faster data 325 00:19:21,400 --> 00:19:24,199 Speaker 1: transfer rates, but it never really caught on in a 326 00:19:24,280 --> 00:19:27,760 Speaker 1: huge way, particularly since DSL would outperform I s D 327 00:19:27,880 --> 00:19:30,960 Speaker 1: and benchmarks, So it was kind of a stop gap 328 00:19:31,040 --> 00:19:33,200 Speaker 1: measure that came a little too late. So no one, 329 00:19:33,440 --> 00:19:37,840 Speaker 1: not not that many people really adopted it. In out 330 00:19:37,880 --> 00:19:41,399 Speaker 1: in California, earth Link signed a deal with Charter Communications 331 00:19:41,480 --> 00:19:44,440 Speaker 1: and a cable company, and the partnership would be one 332 00:19:44,440 --> 00:19:47,520 Speaker 1: of the early ones to provide cable internet service to 333 00:19:47,680 --> 00:19:51,399 Speaker 1: a particular region. So this wasn't nationwide or anything. It 334 00:19:51,440 --> 00:19:54,879 Speaker 1: was for a very specific market, and it did involve 335 00:19:54,920 --> 00:19:57,400 Speaker 1: cable modems. So this was an early example of that 336 00:19:58,000 --> 00:20:01,320 Speaker 1: earth Link executives were clearly thinking ahead because even as 337 00:20:01,359 --> 00:20:04,560 Speaker 1: modems speeds were switching over to fifty bits per second, 338 00:20:04,960 --> 00:20:08,000 Speaker 1: they were looking at technologies that were clearly going to 339 00:20:08,040 --> 00:20:11,480 Speaker 1: be faster and would replace dial up service within within 340 00:20:11,520 --> 00:20:14,240 Speaker 1: a few years. So now it's time to talk a 341 00:20:14,320 --> 00:20:17,400 Speaker 1: little bit about how cable modems work. Now. I mentioned 342 00:20:17,800 --> 00:20:21,680 Speaker 1: that television channels each take up six mega hurts of 343 00:20:21,680 --> 00:20:25,679 Speaker 1: a band of frequencies across the available spectrum of frequencies 344 00:20:25,680 --> 00:20:29,320 Speaker 1: that can travel down a coaxial cable. With cable modems, 345 00:20:29,560 --> 00:20:33,320 Speaker 1: the downstream Internet traffic to customers likewise takes up six 346 00:20:33,359 --> 00:20:36,840 Speaker 1: mega hurts band of frequencies. Upstream is a little different. 347 00:20:36,960 --> 00:20:39,720 Speaker 1: Instead of taking up a whole channel, it actually only 348 00:20:39,800 --> 00:20:42,119 Speaker 1: uses a two mega hurts band of frequencies, so you 349 00:20:42,119 --> 00:20:46,520 Speaker 1: get six mega hurts width down two mega hurts with 350 00:20:47,119 --> 00:20:49,560 Speaker 1: up and since most people are downloading way more than 351 00:20:49,600 --> 00:20:52,280 Speaker 1: their uploading, this really isn't a problem for most people. 352 00:20:53,160 --> 00:20:55,680 Speaker 1: At the provider end of this system, you've got your 353 00:20:55,800 --> 00:20:59,080 Speaker 1: cable modem termination system. At the customer end, you've got 354 00:20:59,080 --> 00:21:01,840 Speaker 1: your cable modem, and that cable modem has a few 355 00:21:01,880 --> 00:21:05,080 Speaker 1: components that allow you to access the Internet. First, there's 356 00:21:05,119 --> 00:21:08,560 Speaker 1: the tuner. This component tunes the modem to the specific 357 00:21:08,640 --> 00:21:12,840 Speaker 1: channel that's carrying the Internet signal as opposed to channel 358 00:21:12,880 --> 00:21:16,640 Speaker 1: carrying C A TV signals. The incoming signal then goes 359 00:21:16,680 --> 00:21:20,399 Speaker 1: to the next component, a demodulator. Now, the most common 360 00:21:20,440 --> 00:21:26,000 Speaker 1: demodulators have four functions. A quadrature amplitude modulation or q 361 00:21:26,160 --> 00:21:30,399 Speaker 1: a M demodulator takes an encoded radio frequency signal and 362 00:21:30,480 --> 00:21:33,200 Speaker 1: turns it into a simple signal that can be processed 363 00:21:33,520 --> 00:21:37,160 Speaker 1: by the analog to digital converter or a D converter. 364 00:21:37,800 --> 00:21:41,040 Speaker 1: The converter's job, it's in the name, really, it's to 365 00:21:41,080 --> 00:21:44,680 Speaker 1: take an analog signal that is a continuous signal, which 366 00:21:44,680 --> 00:21:47,560 Speaker 1: in this case is an electric signal with varying voltage, 367 00:21:48,040 --> 00:21:52,359 Speaker 1: and then transforms that continuous signal into digital information, which 368 00:21:52,400 --> 00:21:56,320 Speaker 1: means it turns into a series of zeros and ones. Next, 369 00:21:56,359 --> 00:21:59,960 Speaker 1: you've got your error correction module. This module analyzes the 370 00:22:00,200 --> 00:22:04,680 Speaker 1: signal and compares it against a known standard to identify 371 00:22:04,680 --> 00:22:09,320 Speaker 1: any potential errors that happened in transmission. Frequently we're dealing 372 00:22:09,359 --> 00:22:12,520 Speaker 1: with data that is an IMPEG format for the purposes 373 00:22:12,560 --> 00:22:15,439 Speaker 1: of grouping data into network frames. IMPEG is not just 374 00:22:15,600 --> 00:22:19,840 Speaker 1: for movies and music. It's it's a kind of a 375 00:22:19,960 --> 00:22:25,600 Speaker 1: data arrangement strategy. So there's also an IMPEG synchronizer in 376 00:22:25,680 --> 00:22:28,400 Speaker 1: cable modems, which really is just there to make sure 377 00:22:28,440 --> 00:22:30,840 Speaker 1: that the frames are all in the correct order. You 378 00:22:30,880 --> 00:22:32,840 Speaker 1: can kind of think of it as being responsible for 379 00:22:32,880 --> 00:22:34,879 Speaker 1: making sure all the puzzle pieces are going to the 380 00:22:34,960 --> 00:22:39,040 Speaker 1: right place to make the full picture. Likewise, the modem 381 00:22:39,119 --> 00:22:41,840 Speaker 1: also has a modulator to take the data you're sending 382 00:22:41,880 --> 00:22:45,040 Speaker 1: back upstream and convert it into a radio frequency signal 383 00:22:45,080 --> 00:22:48,800 Speaker 1: that can travel over the cable connection. Another component of 384 00:22:48,800 --> 00:22:53,840 Speaker 1: cable modems is the Media Access control or MAC address Now, 385 00:22:53,880 --> 00:22:56,840 Speaker 1: this is pretty much a standard part of all networking equipment, 386 00:22:57,080 --> 00:23:00,760 Speaker 1: and that includes devices that connect to works, and it 387 00:23:00,840 --> 00:23:04,040 Speaker 1: serves as a way for these devices to differentiate themselves 388 00:23:04,080 --> 00:23:06,920 Speaker 1: on a local network. So we're really talking about local 389 00:23:06,920 --> 00:23:12,040 Speaker 1: networks here, not Internet. But it's important because otherwise you 390 00:23:12,040 --> 00:23:14,560 Speaker 1: wouldn't have a way for the network to send the 391 00:23:14,560 --> 00:23:17,639 Speaker 1: correct information to the correct device. If you have a 392 00:23:17,680 --> 00:23:20,359 Speaker 1: bunch of different devices connected to the same local area network, 393 00:23:20,400 --> 00:23:22,040 Speaker 1: they have to have a way to say this is 394 00:23:22,040 --> 00:23:25,200 Speaker 1: who I am, so that the right data goes to them. 395 00:23:25,280 --> 00:23:28,720 Speaker 1: All devices connecting to a network have a MAC address, 396 00:23:28,760 --> 00:23:30,880 Speaker 1: and it's how we make sure the right data goes 397 00:23:30,920 --> 00:23:32,879 Speaker 1: to the right device. Otherwise you'd have an issue with 398 00:23:32,960 --> 00:23:36,199 Speaker 1: multiple devices connected to a local area network as a 399 00:23:36,240 --> 00:23:39,080 Speaker 1: further connection to the Internet at large, and everything would 400 00:23:39,080 --> 00:23:41,840 Speaker 1: be mixed up and that would be terrible. Cable modems 401 00:23:41,840 --> 00:23:45,480 Speaker 1: also have a microprocessor to oversee operations within the modem itself, 402 00:23:45,720 --> 00:23:48,359 Speaker 1: and that's a quick and very high level look at 403 00:23:48,359 --> 00:23:51,359 Speaker 1: how early cable modems worked. There's a lot more to 404 00:23:51,440 --> 00:23:53,880 Speaker 1: it than that, but it would require its own episode. 405 00:23:54,119 --> 00:23:56,720 Speaker 1: The important thing for our story is that the cable 406 00:23:56,760 --> 00:24:00,200 Speaker 1: modems represented another big step forward and speed. Also as 407 00:24:00,200 --> 00:24:04,399 Speaker 1: a cable connection as well as the DSL connections are constant. 408 00:24:05,000 --> 00:24:08,040 Speaker 1: That means you don't have to worry about turning it 409 00:24:08,080 --> 00:24:11,240 Speaker 1: on and turning it off, like assuming there's no interruption 410 00:24:11,280 --> 00:24:15,600 Speaker 1: in service. You always have a persistent connection to the Internet, 411 00:24:16,160 --> 00:24:19,119 Speaker 1: unlike a dial up which has to activate a phone 412 00:24:19,119 --> 00:24:21,560 Speaker 1: line and then it has to hang up at the 413 00:24:21,720 --> 00:24:25,640 Speaker 1: end of the session. Your your cable modems are always connected. 414 00:24:25,640 --> 00:24:28,879 Speaker 1: Your dial up modems are only connected when you activate it. 415 00:24:29,400 --> 00:24:32,280 Speaker 1: So Internet services in general and the Web in particular 416 00:24:32,400 --> 00:24:36,120 Speaker 1: started to offer more data intensive features such as streaming 417 00:24:36,119 --> 00:24:39,480 Speaker 1: audio or video. The need for broadband solutions became more pressing, 418 00:24:40,040 --> 00:24:41,960 Speaker 1: but we're still in the early days here, and dial 419 00:24:42,000 --> 00:24:44,080 Speaker 1: up modems would remain a big player for a while. 420 00:24:44,640 --> 00:24:47,639 Speaker 1: Earth Link kept making big alliances. The companies signed a 421 00:24:47,680 --> 00:24:50,640 Speaker 1: deal with Sprint that gave Sprint a stake in earth 422 00:24:50,680 --> 00:24:53,879 Speaker 1: Link in return for access to Sprint's customers, and a 423 00:24:53,920 --> 00:24:56,480 Speaker 1: deal with Apple would mean that earth Links software became 424 00:24:56,520 --> 00:24:59,960 Speaker 1: the default Internet connectivity software and apples i'm ac computers. 425 00:25:00,640 --> 00:25:03,600 Speaker 1: Earth Link also was the default connectivity software for n 426 00:25:03,640 --> 00:25:08,000 Speaker 1: ec Ready computers and Packard Bell computers and comp us 427 00:25:08,080 --> 00:25:11,000 Speaker 1: A chose earth Link to be the default Internet connectivity 428 00:25:11,000 --> 00:25:14,800 Speaker 1: software provider for the computers sold in retail stores. All 429 00:25:14,800 --> 00:25:16,840 Speaker 1: of this led up to that merger with mind Spring, 430 00:25:17,240 --> 00:25:20,280 Speaker 1: which was likewise making big deals. Mind Spring was doing 431 00:25:20,400 --> 00:25:22,800 Speaker 1: very much the same sort of stuff earth Link was doing, 432 00:25:22,840 --> 00:25:25,919 Speaker 1: but over in Atlanta, and earth Link was able to 433 00:25:25,920 --> 00:25:29,280 Speaker 1: dip its toe into DSL through its partnership with Sprint. 434 00:25:29,760 --> 00:25:32,600 Speaker 1: And a quick word about the differences between DSL and cable. 435 00:25:33,440 --> 00:25:36,040 Speaker 1: So DSL goes over phone lines, but you didn't have 436 00:25:36,080 --> 00:25:39,840 Speaker 1: to have a landline to also get DSL. You can 437 00:25:39,840 --> 00:25:42,080 Speaker 1: think of DSL traffic is taking up a frequency of 438 00:25:42,119 --> 00:25:46,080 Speaker 1: bands and telephone lines that's well outside the frequency bands 439 00:25:46,119 --> 00:25:50,439 Speaker 1: that are used to transmit voice communications. With DSL, you 440 00:25:50,440 --> 00:25:53,800 Speaker 1: can get pretty fast Internet speeds, much faster than dial up. 441 00:25:53,840 --> 00:25:56,240 Speaker 1: But it also depended upon how far away you were 442 00:25:56,400 --> 00:25:59,320 Speaker 1: from the DSL provider, kind of like when I described 443 00:25:59,359 --> 00:26:03,000 Speaker 1: cable early or if you're really far away from whatever 444 00:26:03,000 --> 00:26:06,400 Speaker 1: the provider is, you're going to get lower transfer rates, 445 00:26:06,400 --> 00:26:09,360 Speaker 1: so you're gonna get lower Internet speeds. That's the way 446 00:26:09,400 --> 00:26:12,040 Speaker 1: we typically think about it. Cable, on the other hand, 447 00:26:12,080 --> 00:26:14,080 Speaker 1: could provide a good experience even if you were far 448 00:26:14,119 --> 00:26:18,399 Speaker 1: away from a provider. However, DSL allowed for a dedicated 449 00:26:18,560 --> 00:26:22,080 Speaker 1: line to each customer, So when you had a DSL line, 450 00:26:22,720 --> 00:26:27,359 Speaker 1: you had a dedicated connection, whereas cable is a shared 451 00:26:27,440 --> 00:26:31,600 Speaker 1: connection across entire neighborhoods. So with cable, if there are 452 00:26:31,640 --> 00:26:33,400 Speaker 1: a lot of people in your neighborhood who are all 453 00:26:33,560 --> 00:26:37,880 Speaker 1: really heavy Internet users, you're gonna see your speeds take 454 00:26:37,920 --> 00:26:40,879 Speaker 1: a hit because they might be streaming for a K 455 00:26:41,119 --> 00:26:43,960 Speaker 1: video or something, or they might be gaming, they might 456 00:26:43,960 --> 00:26:46,640 Speaker 1: be doing something that's just taking up a lot of bandwidth, 457 00:26:47,160 --> 00:26:51,440 Speaker 1: and so as a result, the overall bandwidth that's shared 458 00:26:51,640 --> 00:26:55,000 Speaker 1: for the entire community is taking a hit. Anyway, earth 459 00:26:55,040 --> 00:26:57,320 Speaker 1: Link was now working with partners that would allow it 460 00:26:57,359 --> 00:27:01,560 Speaker 1: to kind of trans Asian from dial up, but only 461 00:27:01,560 --> 00:27:06,520 Speaker 1: because they were piggybacking onto these other providers. After the 462 00:27:06,600 --> 00:27:11,000 Speaker 1: merger with MindSpring, the new company officially called earth Link Incorporated, 463 00:27:11,240 --> 00:27:14,439 Speaker 1: would continue to grow, and like we've seen, that growth 464 00:27:14,480 --> 00:27:18,040 Speaker 1: was mainly through acquisitions, such as when earth Link purchased 465 00:27:18,040 --> 00:27:21,760 Speaker 1: an I s B called one Main dot Com that's 466 00:27:21,840 --> 00:27:25,000 Speaker 1: O N E M A I N and earth Link 467 00:27:25,160 --> 00:27:28,679 Speaker 1: continued to branch out beyond dial up, DSL and Cable 468 00:27:28,720 --> 00:27:32,960 Speaker 1: Access partnering with Hughes Network Systems to provide satellite broadband 469 00:27:32,960 --> 00:27:36,200 Speaker 1: services for customers who lived in rural areas where cable 470 00:27:36,280 --> 00:27:40,480 Speaker 1: or DSL connections could not reach. So satellite systems work 471 00:27:40,640 --> 00:27:43,439 Speaker 1: differently from DSL and cable and that you need to 472 00:27:43,440 --> 00:27:47,199 Speaker 1: have a transceiver in other words, of satellite dish to 473 00:27:47,320 --> 00:27:50,200 Speaker 1: interface with the system. You still have a modulator, which 474 00:27:50,320 --> 00:27:53,119 Speaker 1: is the bit that translates data from one form to another. 475 00:27:54,040 --> 00:27:56,480 Speaker 1: When you send something on your computer to the Internet, 476 00:27:56,520 --> 00:27:59,960 Speaker 1: the modulator converts the digital information from your computer into 477 00:28:00,119 --> 00:28:04,000 Speaker 1: radio signals that the satellite dish then transmits up to 478 00:28:04,240 --> 00:28:07,440 Speaker 1: a satellite that's up in orbit way above the customer, 479 00:28:07,680 --> 00:28:10,720 Speaker 1: and the satellite then beams that information back down to 480 00:28:10,760 --> 00:28:14,199 Speaker 1: the provider, which sends data back up into space to 481 00:28:14,280 --> 00:28:17,280 Speaker 1: that satellite, which then beams it back down to the customer. 482 00:28:17,480 --> 00:28:20,120 Speaker 1: So it all works the same way, but in reverse. Now, 483 00:28:20,160 --> 00:28:23,840 Speaker 1: as you might imagine beaming data up into space and 484 00:28:23,840 --> 00:28:26,960 Speaker 1: then having it come back down again, and having that 485 00:28:27,200 --> 00:28:29,480 Speaker 1: happen in two different directions means that there can be 486 00:28:29,480 --> 00:28:32,520 Speaker 1: a bit of delay when you do something on the Internet, 487 00:28:32,560 --> 00:28:35,560 Speaker 1: like when you click on a link, and then there 488 00:28:35,600 --> 00:28:38,080 Speaker 1: could be a delay before you see a result. The 489 00:28:38,200 --> 00:28:41,480 Speaker 1: data rate transfer speed can still be really high. You 490 00:28:41,480 --> 00:28:45,000 Speaker 1: can still get you know, data, very fast rates, but 491 00:28:45,080 --> 00:28:48,080 Speaker 1: there's more latency or lag than you would have with 492 00:28:48,160 --> 00:28:51,480 Speaker 1: other solutions. Earth Link even secured in agreement with the 493 00:28:51,560 --> 00:28:54,600 Speaker 1: leading I s P in the United States, America Online. 494 00:28:55,160 --> 00:28:57,600 Speaker 1: That agreement would allow earth Link to use Time Warner 495 00:28:57,680 --> 00:29:01,000 Speaker 1: cable lines to offer up high speed k Internet service 496 00:29:01,040 --> 00:29:04,120 Speaker 1: to customers, because at this point there was the infamous 497 00:29:04,120 --> 00:29:07,640 Speaker 1: America Online Time Warner merger, one of the mergers that 498 00:29:07,840 --> 00:29:09,680 Speaker 1: at one point was pointed at as being one of 499 00:29:09,720 --> 00:29:13,280 Speaker 1: the worst big tech mergers of all time. The year 500 00:29:13,440 --> 00:29:16,080 Speaker 1: was two thousand, and earth Link was looking to put 501 00:29:16,120 --> 00:29:19,480 Speaker 1: behind it a history of struggling to be profitable. Earth 502 00:29:19,520 --> 00:29:22,960 Speaker 1: Link hannot really made a profit yet they were bringing 503 00:29:22,960 --> 00:29:25,240 Speaker 1: in a lot of revenue, but again they were spending 504 00:29:25,240 --> 00:29:27,800 Speaker 1: a lot in acquisitions and efforts to grow and stay 505 00:29:27,840 --> 00:29:30,280 Speaker 1: ahead of the competition, as well as to make moves 506 00:29:30,280 --> 00:29:34,240 Speaker 1: and diversifying beyond dial up. And this was likely a 507 00:29:34,280 --> 00:29:39,080 Speaker 1: necessity as the period between two thousands saw thousands of 508 00:29:39,200 --> 00:29:42,560 Speaker 1: local and regional I s p s, like around ten 509 00:29:42,640 --> 00:29:46,240 Speaker 1: thousand of these suckers. But they started to consolidate or 510 00:29:46,280 --> 00:29:49,560 Speaker 1: they were getting swept up in various acquisitions, and there 511 00:29:49,600 --> 00:29:52,400 Speaker 1: was a general move of consolidation in the industry, and 512 00:29:52,480 --> 00:29:55,240 Speaker 1: earth Link was one of the bigger fish gobbling up 513 00:29:55,320 --> 00:29:57,720 Speaker 1: smaller fish in the I s P pond as it 514 00:29:57,800 --> 00:30:01,400 Speaker 1: were sky Dayton. Meanwhile, the founder of earth Link, who 515 00:30:01,520 --> 00:30:04,720 Speaker 1: had remained chairman but who had stepped down as CEO, 516 00:30:04,880 --> 00:30:09,000 Speaker 1: founded another venture called Bongo. This company also focused on 517 00:30:09,080 --> 00:30:13,120 Speaker 1: providing internet service, but through WiFi, and rather than building 518 00:30:13,120 --> 00:30:16,680 Speaker 1: out infrastructure, Bongo would partner with companies that had already 519 00:30:16,680 --> 00:30:20,040 Speaker 1: built out WiFi networks, much as earth Link had partnered 520 00:30:20,080 --> 00:30:22,760 Speaker 1: with other I s p s or network systems back 521 00:30:22,760 --> 00:30:25,840 Speaker 1: in the day. Earth Link would be an investor in Boingo, 522 00:30:26,200 --> 00:30:30,200 Speaker 1: but the two ventures wouldn't be intertwined too much. In 523 00:30:30,240 --> 00:30:33,760 Speaker 1: the early two thousand's, earth Link would feel the squeeze 524 00:30:33,800 --> 00:30:37,240 Speaker 1: as more households made the transition from dial up to DSL, 525 00:30:37,480 --> 00:30:41,080 Speaker 1: cable or satellite service. While earth Link had partnerships with 526 00:30:41,120 --> 00:30:44,200 Speaker 1: companies that provided these services, the fact was that earth 527 00:30:44,240 --> 00:30:48,400 Speaker 1: Link itself didn't own any of that infrastructure, and the 528 00:30:48,440 --> 00:30:53,000 Speaker 1: Telecommunications Act of six meant that phone and cable companies 529 00:30:53,400 --> 00:30:57,360 Speaker 1: could also serve as Internet service providers. So earth Link 530 00:30:57,440 --> 00:31:00,120 Speaker 1: was looking at a couple of major threats to its business. 531 00:31:00,360 --> 00:31:03,480 Speaker 1: There was a migration away from premium dial up internet 532 00:31:03,480 --> 00:31:05,960 Speaker 1: service that was its bread and butter. And there was 533 00:31:06,000 --> 00:31:08,520 Speaker 1: the rise of the mega I s p s that 534 00:31:08,640 --> 00:31:11,920 Speaker 1: owned much of the broadband infrastructure. In fact, some of 535 00:31:11,960 --> 00:31:15,040 Speaker 1: them were major parts of the backbone of the Internet. 536 00:31:15,440 --> 00:31:17,800 Speaker 1: So while earth Link would start to post some profitable 537 00:31:17,920 --> 00:31:20,959 Speaker 1: quarters largely due to a combination of cost cutting and 538 00:31:21,000 --> 00:31:25,120 Speaker 1: diversifying into broadband, analysts were already worrying that the company 539 00:31:25,200 --> 00:31:28,040 Speaker 1: was going to go from a big fish to bait 540 00:31:28,640 --> 00:31:31,600 Speaker 1: in that I s P pond. I'll explain more when 541 00:31:31,640 --> 00:31:41,400 Speaker 1: we come back from this quick break. A lot happened 542 00:31:41,800 --> 00:31:44,320 Speaker 1: in the two thousand's, even if I can't remember most 543 00:31:44,360 --> 00:31:47,480 Speaker 1: of it. We saw the dot com bubble burst, which 544 00:31:47,520 --> 00:31:50,800 Speaker 1: had a major ripple beyond just the dot com companies 545 00:31:50,840 --> 00:31:54,520 Speaker 1: themselves and affected related businesses, including the I s P business. 546 00:31:55,320 --> 00:31:57,720 Speaker 1: We saw the move to broadband that meant that earth 547 00:31:57,760 --> 00:32:00,080 Speaker 1: Link was going to lose subscribers even as it was 548 00:32:00,120 --> 00:32:03,640 Speaker 1: adding more broadband services or partnering with other companies that 549 00:32:03,680 --> 00:32:06,760 Speaker 1: did the same. In two thousand five, while earth Link 550 00:32:06,800 --> 00:32:09,960 Speaker 1: would add some broadband customers. The balance was out of 551 00:32:10,000 --> 00:32:12,920 Speaker 1: whack when it compared against the loss of dial up customers. 552 00:32:12,920 --> 00:32:16,560 Speaker 1: Earth Link would lose seventy three thousand customers in two 553 00:32:16,560 --> 00:32:20,120 Speaker 1: thousand five as a whole. And then a decision by 554 00:32:20,160 --> 00:32:24,880 Speaker 1: the US Federal Communications Commission, or FCC, really hit earth 555 00:32:24,920 --> 00:32:28,840 Speaker 1: Link hard. The decision gave telecommunications companies the right to 556 00:32:29,040 --> 00:32:34,360 Speaker 1: stop leasing lines to third party DSL providers at wholesale prices, 557 00:32:34,800 --> 00:32:38,600 Speaker 1: you know, like earth Link. So previously these companies were compelled, 558 00:32:38,720 --> 00:32:42,200 Speaker 1: they were regulated to offer those wholesale lease rates to 559 00:32:42,320 --> 00:32:44,720 Speaker 1: third party I s p s. That's how earth Link 560 00:32:44,720 --> 00:32:48,320 Speaker 1: built much of its business, at least those lines from 561 00:32:48,360 --> 00:32:51,719 Speaker 1: these bigger companies at a lower rate and then resold 562 00:32:51,800 --> 00:32:54,640 Speaker 1: them to customers at a higher rate. That was just 563 00:32:54,680 --> 00:32:57,400 Speaker 1: the basics of the business. But the FCC decision and 564 00:32:57,520 --> 00:32:59,920 Speaker 1: a subsequent decision by the U s Supreme Court the 565 00:33:00,080 --> 00:33:03,240 Speaker 1: upheld It meant that the telecom companies were under no 566 00:33:03,440 --> 00:33:06,680 Speaker 1: obligation to continue doing this. They didn't have to offer 567 00:33:06,720 --> 00:33:09,160 Speaker 1: those lower prices top third party I s p s. 568 00:33:09,680 --> 00:33:12,960 Speaker 1: In the short term, the telecom companies were agreeing to 569 00:33:13,000 --> 00:33:15,920 Speaker 1: continue to lease lines to I s p s. So 570 00:33:16,120 --> 00:33:18,760 Speaker 1: even though they weren't compelled to, they continue to do 571 00:33:18,800 --> 00:33:22,440 Speaker 1: it because these I s p s were really big customers. 572 00:33:22,800 --> 00:33:26,200 Speaker 1: But since the telecom companies were themselves starting to become 573 00:33:26,280 --> 00:33:28,600 Speaker 1: I s p s, the writing was on the wall, 574 00:33:29,440 --> 00:33:31,960 Speaker 1: right because the ideas, yeah, I'll continue to lease this 575 00:33:32,040 --> 00:33:35,040 Speaker 1: to you at a lower rate, but meanwhile, I'm building 576 00:33:35,040 --> 00:33:38,040 Speaker 1: out my own Internet service provider business, and once it 577 00:33:38,080 --> 00:33:40,600 Speaker 1: gets big enough where I don't need you anymore, I'm 578 00:33:40,600 --> 00:33:43,160 Speaker 1: gonna cut you off. And then I get a two fur. 579 00:33:44,080 --> 00:33:48,360 Speaker 1: I get to sell to your customers instead of having 580 00:33:48,440 --> 00:33:51,440 Speaker 1: you do it, and I get to squeeze you out 581 00:33:51,440 --> 00:33:54,120 Speaker 1: of business so I don't have a competitor anymore. Yeah, 582 00:33:54,200 --> 00:33:57,480 Speaker 1: it was a little nefarious earth Links strategy to combat 583 00:33:57,520 --> 00:34:00,360 Speaker 1: this was multifaceted. Part of it was to get into 584 00:34:00,440 --> 00:34:03,719 Speaker 1: building out its own infrastructure to compete against the cable 585 00:34:03,720 --> 00:34:07,840 Speaker 1: and telephone companies, but it was way behind on that front, right, 586 00:34:08,120 --> 00:34:11,360 Speaker 1: Like I mean, after all, let's imagine that you walk 587 00:34:11,520 --> 00:34:15,680 Speaker 1: into cookie Town, USA, where there are you know, a 588 00:34:15,760 --> 00:34:20,040 Speaker 1: dozen top level cookie companies there, and you decide you're 589 00:34:20,040 --> 00:34:24,000 Speaker 1: going to compete, but the cookie companies have already managed 590 00:34:24,040 --> 00:34:27,520 Speaker 1: to buy up almost all of the ingredients needed to 591 00:34:27,600 --> 00:34:30,880 Speaker 1: make cookies, and they have saturated the market with cookies. 592 00:34:31,080 --> 00:34:33,839 Speaker 1: It would be very hard for you to make any 593 00:34:33,960 --> 00:34:37,560 Speaker 1: uh in way into that system. Well, earth Link was 594 00:34:37,640 --> 00:34:40,120 Speaker 1: kind of facing a similar thing, but instead of cookies, 595 00:34:40,600 --> 00:34:43,320 Speaker 1: while there were cookies. Because it's the Internet, bad analogy, 596 00:34:43,520 --> 00:34:46,239 Speaker 1: my fault. I'll go sit in the corner. Okay, I'm back. 597 00:34:46,640 --> 00:34:48,840 Speaker 1: So earth Link also looked to launch its own cell 598 00:34:48,880 --> 00:34:52,120 Speaker 1: phone business at this time and its own landline business. 599 00:34:52,239 --> 00:34:55,560 Speaker 1: Essentially was trying to enter a very established and very 600 00:34:55,600 --> 00:34:59,640 Speaker 1: competitive market. In two thousand five, earth Link helped launch 601 00:34:59,719 --> 00:35:02,319 Speaker 1: he e O, which was another company led by you 602 00:35:02,400 --> 00:35:06,160 Speaker 1: guessed it, Sky Dayton, the founder of earth Link. Helio 603 00:35:06,320 --> 00:35:09,960 Speaker 1: was a mobile virtual network operator or m v n O, 604 00:35:10,719 --> 00:35:15,080 Speaker 1: and like earth Link, like Boingo, this was another business 605 00:35:15,239 --> 00:35:18,480 Speaker 1: that would run services on top of the infrastructure that 606 00:35:18,600 --> 00:35:21,560 Speaker 1: was owned by other companies and sensing a theme here. 607 00:35:22,120 --> 00:35:26,000 Speaker 1: The initiative proved unprofitable for earth Link, which would pull 608 00:35:26,040 --> 00:35:28,640 Speaker 1: out of the arrangement in two thousand seven, so it 609 00:35:28,719 --> 00:35:32,200 Speaker 1: was only part of Helio for two years. As for Helio, 610 00:35:32,360 --> 00:35:35,359 Speaker 1: Virgin Mobile USA would acquire it in two thousand eight 611 00:35:35,640 --> 00:35:40,640 Speaker 1: and would sunset the brand in interesting little side note here. 612 00:35:40,719 --> 00:35:44,319 Speaker 1: Sky Dayton has this history of starting up companies and 613 00:35:44,360 --> 00:35:46,920 Speaker 1: then stepping down a couple of years later. I think 614 00:35:46,920 --> 00:35:49,799 Speaker 1: I mentioned in the last episode. He strikes me as 615 00:35:49,840 --> 00:35:53,080 Speaker 1: the sort of person who really likes to get things 616 00:35:53,120 --> 00:35:56,479 Speaker 1: moving and then hand that over to somebody else who's 617 00:35:56,520 --> 00:36:00,400 Speaker 1: better at fostering and growing a company, and then he 618 00:36:00,440 --> 00:36:04,640 Speaker 1: moves on to start something new again. But another part 619 00:36:04,680 --> 00:36:09,200 Speaker 1: of earth Link's strategy to kind of fight back against 620 00:36:09,239 --> 00:36:13,680 Speaker 1: these strikes that were against it was really getting started 621 00:36:13,680 --> 00:36:15,880 Speaker 1: around two thousand four. It was the the bid for 622 00:36:15,960 --> 00:36:20,960 Speaker 1: the opportunity to become the WiFi service provider of municipal customers, so, 623 00:36:21,000 --> 00:36:25,040 Speaker 1: in other words, to become the municipal WiFi company for 624 00:36:25,239 --> 00:36:29,440 Speaker 1: cities like Philadelphia. Atlanta was one as well, there were 625 00:36:29,520 --> 00:36:32,160 Speaker 1: quite a few, and these were cities that were looking 626 00:36:32,200 --> 00:36:35,759 Speaker 1: to create city wide WiFi service for citizens, the idea 627 00:36:35,880 --> 00:36:41,360 Speaker 1: being that instead of using wired connections for everybody's Internet connectivity, 628 00:36:41,600 --> 00:36:45,400 Speaker 1: maybe you offer a WiFi as well. And part of 629 00:36:45,400 --> 00:36:47,920 Speaker 1: this strategy would prove to be a lot more thorny 630 00:36:48,000 --> 00:36:51,360 Speaker 1: than earth Link executives may have anticipated. So the story 631 00:36:51,360 --> 00:36:54,880 Speaker 1: plays out in much the same way across the different cities. 632 00:36:55,160 --> 00:36:57,919 Speaker 1: So we're gonna stick with Philadelphia to learn what happened there, 633 00:36:57,960 --> 00:37:00,759 Speaker 1: but just know that what happened in Philadelphia, uh is 634 00:37:00,880 --> 00:37:03,520 Speaker 1: very very similar to what happened in other cities across 635 00:37:03,520 --> 00:37:07,600 Speaker 1: the United States. The original agreement in Philadelphia would give 636 00:37:07,600 --> 00:37:11,200 Speaker 1: earth Link access to city utility polls to mount WiFi 637 00:37:11,360 --> 00:37:15,120 Speaker 1: routers to provide service to people in Philadelphia. And that's 638 00:37:15,239 --> 00:37:18,120 Speaker 1: a big part of it is that the ability to 639 00:37:18,280 --> 00:37:22,080 Speaker 1: access those polls is key for something like this, and 640 00:37:22,200 --> 00:37:25,480 Speaker 1: you don't just magically get it. You have to go 641 00:37:25,560 --> 00:37:28,560 Speaker 1: through a lot of bureau bureaucracy in order to land 642 00:37:28,600 --> 00:37:32,520 Speaker 1: that permission, and it's expensive and time consuming. But this 643 00:37:32,560 --> 00:37:36,120 Speaker 1: was part of the deal, and the arrangement meant that 644 00:37:36,160 --> 00:37:40,240 Speaker 1: earth Link was to provide twenty three zones throughout Philadelphia 645 00:37:40,680 --> 00:37:43,680 Speaker 1: that would be free internet hot spots. So it wasn't 646 00:37:43,719 --> 00:37:46,759 Speaker 1: that all WiFi was free, but in these twenty three 647 00:37:46,800 --> 00:37:49,680 Speaker 1: spots around the city, citizens would be able to access 648 00:37:49,760 --> 00:37:53,920 Speaker 1: the service free of charge. Now, beyond those zones, you 649 00:37:53,920 --> 00:37:56,719 Speaker 1: would still have WiFi coverage and citizens would still be 650 00:37:56,760 --> 00:37:59,719 Speaker 1: able to access the WiFi, but they would have to 651 00:37:59,760 --> 00:38:03,480 Speaker 1: see subscribed to earth Links service for Wi Fi internet 652 00:38:04,040 --> 00:38:07,600 Speaker 1: for going a physical connection entirely, so you could, in theory, 653 00:38:07,880 --> 00:38:11,919 Speaker 1: have a WiFi receiver in your home you pay earth Link, 654 00:38:12,200 --> 00:38:15,520 Speaker 1: assuming you're not in one of those free hotspots. You 655 00:38:15,520 --> 00:38:17,680 Speaker 1: would pay earth Link for the privilege of being able 656 00:38:17,719 --> 00:38:20,520 Speaker 1: to connect to their network, and you would get your 657 00:38:20,520 --> 00:38:23,040 Speaker 1: Internet that way. But a couple of big challenges made 658 00:38:23,080 --> 00:38:27,800 Speaker 1: this way harder than either Philadelphia or earth Link anticipated. First, 659 00:38:28,680 --> 00:38:32,400 Speaker 1: the marketing strategy was lackluster, and earth Link was not 660 00:38:32,480 --> 00:38:36,640 Speaker 1: receiving as many subscribers for their service as they had projected, 661 00:38:36,880 --> 00:38:39,520 Speaker 1: so they weren't getting as much revenue in to help 662 00:38:39,560 --> 00:38:43,160 Speaker 1: support the initiative as they had planned for. But just 663 00:38:43,200 --> 00:38:45,960 Speaker 1: as significant of that was that the company and the 664 00:38:46,000 --> 00:38:48,360 Speaker 1: city discovered that in order to provide the amount of 665 00:38:48,400 --> 00:38:52,040 Speaker 1: coverage needed to meet the terms of this agreement, earth 666 00:38:52,040 --> 00:38:54,120 Speaker 1: Link was going to have to build out way more 667 00:38:54,200 --> 00:38:58,480 Speaker 1: infrastructure and deploy many more WiFi routers than the initial 668 00:38:58,520 --> 00:39:02,200 Speaker 1: plan called for. The project went well over budget, became 669 00:39:02,239 --> 00:39:05,400 Speaker 1: a difficult thing to manage, and the low subscriber responsement 670 00:39:05,480 --> 00:39:09,320 Speaker 1: that the whole endeavor was becoming very expensive. Gary Betty, 671 00:39:09,560 --> 00:39:13,399 Speaker 1: the CEO of earth Link until two thousand seven, had 672 00:39:13,440 --> 00:39:17,120 Speaker 1: been gung ho on the municipal WiFi initiative, but then 673 00:39:17,280 --> 00:39:21,040 Speaker 1: he got sick and he passed away in January two seven, 674 00:39:21,480 --> 00:39:25,360 Speaker 1: and the succeeding CEO of earth Link roll up, p. Huff, 675 00:39:25,840 --> 00:39:28,640 Speaker 1: decided that it was a long shot to make the 676 00:39:28,680 --> 00:39:32,200 Speaker 1: programs work from an economical standpoint, and so starting in 677 00:39:32,239 --> 00:39:36,120 Speaker 1: two thousand seven, earth Link began to extricate itself from 678 00:39:36,120 --> 00:39:38,640 Speaker 1: the various deals it had made with the United States 679 00:39:38,719 --> 00:39:43,080 Speaker 1: cities to be the WiFi provider for municipal WiFi. Earth 680 00:39:43,120 --> 00:39:47,040 Speaker 1: Links reversal hurt the company's reputation quite a bit. Cities 681 00:39:47,040 --> 00:39:49,560 Speaker 1: like San Francisco had banked on earth Link being a 682 00:39:49,600 --> 00:39:53,799 Speaker 1: WiFi provider, with the ambitious plan to offer free WiFi 683 00:39:53,840 --> 00:39:57,279 Speaker 1: to all San Francisco residents with a deal that would 684 00:39:57,280 --> 00:40:01,239 Speaker 1: see the city earth Link and Google were together, but 685 00:40:01,360 --> 00:40:04,040 Speaker 1: earth Link's announcement that it was selling off its municipal 686 00:40:04,080 --> 00:40:07,560 Speaker 1: WiFi assets meant that that plan had to be scuttled. 687 00:40:08,040 --> 00:40:10,680 Speaker 1: Things got even uglier in two thousand eight when earth 688 00:40:10,719 --> 00:40:15,040 Speaker 1: Link essentially gave Philadelphia an aulimatum, take the WiFi service 689 00:40:15,160 --> 00:40:18,200 Speaker 1: off of our hands, or we will shut it down. So, 690 00:40:18,200 --> 00:40:21,920 Speaker 1: in other words, earth Link was still maintaining and operating 691 00:40:21,960 --> 00:40:24,640 Speaker 1: that network in Philadelphia. It had stopped building it out, 692 00:40:24,760 --> 00:40:28,240 Speaker 1: but now it just wanted out completely. In two thousand 693 00:40:28,280 --> 00:40:30,880 Speaker 1: and eight, earth Link was still depending heavily on a 694 00:40:30,960 --> 00:40:34,560 Speaker 1: dwindling base of dial up customers. The company had managed 695 00:40:34,600 --> 00:40:38,000 Speaker 1: to cut operating expenses largely by laying off the marketing 696 00:40:38,040 --> 00:40:41,400 Speaker 1: and laying off employees. There was no longer trying to 697 00:40:41,480 --> 00:40:45,040 Speaker 1: attract new customers, so it was really just trying to 698 00:40:45,080 --> 00:40:48,200 Speaker 1: hold onto the people it already had. The dial up 699 00:40:48,200 --> 00:40:51,160 Speaker 1: customer base was getting smaller year over year as more 700 00:40:51,160 --> 00:40:53,839 Speaker 1: people were making the switch to broadband, but by two 701 00:40:53,880 --> 00:40:56,920 Speaker 1: thousand eight that rate of attrition was slowing down. So, 702 00:40:56,960 --> 00:40:59,759 Speaker 1: in other words, earth Link would continue to lose customers, 703 00:41:00,160 --> 00:41:03,000 Speaker 1: but the rate of loss was slowing down. So it's 704 00:41:03,000 --> 00:41:05,439 Speaker 1: like it's like having your annual meeting and saying, hey, 705 00:41:05,480 --> 00:41:09,000 Speaker 1: good good news, everybody, we lost fewer people than we 706 00:41:09,040 --> 00:41:11,959 Speaker 1: did last year. It's kind of a hard pep rally. 707 00:41:12,000 --> 00:41:14,959 Speaker 1: I guess it's not exactly the business model you want 708 00:41:15,000 --> 00:41:17,719 Speaker 1: as the cornerstone for your company, but it's what they 709 00:41:17,760 --> 00:41:21,680 Speaker 1: had in earth Link became embroiled in a multi party 710 00:41:21,719 --> 00:41:26,239 Speaker 1: debate about the merger between Comcast at NBC Universal earth 711 00:41:26,280 --> 00:41:28,720 Speaker 1: Link objected to the merger and campaign for the FCC 712 00:41:28,960 --> 00:41:32,239 Speaker 1: to step in and stop it, or, if not stop it, 713 00:41:32,320 --> 00:41:36,280 Speaker 1: to bring that idea of compelling companies to lease lines 714 00:41:36,360 --> 00:41:38,879 Speaker 1: to third party i sp s at wholesale rates back, 715 00:41:39,200 --> 00:41:41,919 Speaker 1: just as the telecom companies have done until two thou five. 716 00:41:42,239 --> 00:41:44,759 Speaker 1: They're saying the cable companies never had to do that, 717 00:41:45,600 --> 00:41:49,440 Speaker 1: but maybe they should, especially if you're having big content 718 00:41:49,680 --> 00:41:54,799 Speaker 1: companies merging with provider companies. Ultimately, that plan did not 719 00:41:54,880 --> 00:41:56,759 Speaker 1: work out in the I s P landscape in the 720 00:41:56,840 --> 00:42:01,440 Speaker 1: United States. We become increasingly the domain of huge companies 721 00:42:01,800 --> 00:42:05,560 Speaker 1: that would get even more huger as some of the 722 00:42:05,560 --> 00:42:09,880 Speaker 1: biggest mergers in business history would follow. So this is 723 00:42:09,880 --> 00:42:12,720 Speaker 1: where we see those giant I s p s become 724 00:42:13,600 --> 00:42:18,800 Speaker 1: truly enormous, and we see competition shrink as a result. 725 00:42:19,080 --> 00:42:22,000 Speaker 1: Now earth Links still stuck around. It held onto its 726 00:42:22,000 --> 00:42:25,120 Speaker 1: customers as fiercely as it could. Revenue and income would 727 00:42:25,160 --> 00:42:28,280 Speaker 1: fluctuate wildly in the two thousand's, with some years seeing 728 00:42:28,280 --> 00:42:31,400 Speaker 1: more than a billion dollars in revenue, not not profit, 729 00:42:31,520 --> 00:42:34,960 Speaker 1: but revenue, and other years seeing that revenue dropped to 730 00:42:35,239 --> 00:42:39,120 Speaker 1: six million dollars, and then swing back the other way. 731 00:42:39,239 --> 00:42:42,239 Speaker 1: Sometimes it was the acquisitions that helped earth Link out 732 00:42:42,280 --> 00:42:44,879 Speaker 1: and gave it a really good year, but sometimes those 733 00:42:44,920 --> 00:42:49,279 Speaker 1: acquisitions would lead to big pains. And in news broke 734 00:42:49,320 --> 00:42:52,800 Speaker 1: that earth Link itself was going to be acquired. Another 735 00:42:52,880 --> 00:42:55,560 Speaker 1: regional I s P in the United States called Windstream 736 00:42:55,719 --> 00:42:58,440 Speaker 1: announced it would acquire earth Link for a deal valued 737 00:42:58,480 --> 00:43:02,560 Speaker 1: that six hundred seventy three million dollars, and it was 738 00:43:02,600 --> 00:43:05,600 Speaker 1: an all stock deal, and it also included Windstream assuming 739 00:43:05,600 --> 00:43:08,560 Speaker 1: earth Links four hundred thirty six million dollars of debt, 740 00:43:09,040 --> 00:43:11,680 Speaker 1: meaning that once you factored the debt into the deal, 741 00:43:11,880 --> 00:43:14,800 Speaker 1: it was really a one point one billion dollar deal. 742 00:43:15,560 --> 00:43:19,440 Speaker 1: Windstream had around one million consumer customers, you know, so 743 00:43:19,640 --> 00:43:23,360 Speaker 1: non business customers, and earth Link had around six hundred 744 00:43:23,480 --> 00:43:27,280 Speaker 1: seventy one thousand, according to press releases about the merger. 745 00:43:27,680 --> 00:43:31,360 Speaker 1: But this was about more than consolidating that small market 746 00:43:31,360 --> 00:43:34,319 Speaker 1: of dial up customers. Also, some of those customers were 747 00:43:34,400 --> 00:43:37,080 Speaker 1: DSL or cable because both earth Link and Windstream would 748 00:43:37,120 --> 00:43:40,880 Speaker 1: purchase and resell lines on other networks, uh not a 749 00:43:40,880 --> 00:43:42,640 Speaker 1: whole lot, because it was hard to compete since they 750 00:43:42,640 --> 00:43:45,880 Speaker 1: couldn't buy those lines or lease those lines at wholesale prices. 751 00:43:46,280 --> 00:43:47,880 Speaker 1: They would have to mark up the price to make 752 00:43:47,920 --> 00:43:50,239 Speaker 1: a profit, and that would just mean that you would 753 00:43:50,480 --> 00:43:53,040 Speaker 1: as a customer, a personal customer, you would look at 754 00:43:53,080 --> 00:43:54,799 Speaker 1: the different I S s in your area and you'd 755 00:43:54,800 --> 00:43:56,560 Speaker 1: say like, well, I could go with a T and T, 756 00:43:57,480 --> 00:43:59,040 Speaker 1: or I could go with earth Link. But earth Link 757 00:43:59,080 --> 00:44:01,719 Speaker 1: actually costs more of a T because earth Link had 758 00:44:01,760 --> 00:44:04,160 Speaker 1: to mark up the price in order to make a profit. 759 00:44:04,239 --> 00:44:07,160 Speaker 1: Didn't make much sense. So the business customers were a 760 00:44:07,160 --> 00:44:09,160 Speaker 1: really big part of this deal. It wasn't so much 761 00:44:09,200 --> 00:44:12,600 Speaker 1: the consumers as it was the enterprise customers, as were 762 00:44:12,640 --> 00:44:16,680 Speaker 1: the various tax benefits and other financial wizardry that's beyond 763 00:44:16,760 --> 00:44:19,919 Speaker 1: my ken. So there are you know, reasons why these 764 00:44:20,280 --> 00:44:22,960 Speaker 1: Windstream came in to acquire earth Link that are go 765 00:44:23,120 --> 00:44:26,400 Speaker 1: beyond just we want access to their customers. The deal 766 00:44:26,560 --> 00:44:29,760 Speaker 1: happened in the winter of Seen, and it led multiple 767 00:44:29,800 --> 00:44:35,040 Speaker 1: tech websites and magazines to declare earth Link was effectively dead. 768 00:44:35,680 --> 00:44:39,880 Speaker 1: But a little less than two years later, in December eighteen, 769 00:44:40,239 --> 00:44:43,440 Speaker 1: earth Link would burst out of the grave, zombie like 770 00:44:44,000 --> 00:44:46,400 Speaker 1: and call out for brains, which is my way of 771 00:44:46,400 --> 00:44:49,480 Speaker 1: saying that Windstream would actually turn around and sell earth 772 00:44:49,520 --> 00:44:52,840 Speaker 1: Link off again to another party, this one an investment 773 00:44:52,880 --> 00:44:57,000 Speaker 1: company called Thrive Capital out of Dallas, Texas, and the 774 00:44:57,120 --> 00:45:00,840 Speaker 1: deal was for a three hundred thirty million dollars in cash. 775 00:45:00,880 --> 00:45:04,799 Speaker 1: So remember, I mean, that's a lot of money. Don't 776 00:45:04,800 --> 00:45:07,319 Speaker 1: get me wrong, it's a princely some. But unless I'm 777 00:45:07,320 --> 00:45:10,359 Speaker 1: doing my math incorrectly, it means Windstream spent more than 778 00:45:10,440 --> 00:45:14,040 Speaker 1: six hundred million dollars on a company in stocks and 779 00:45:14,080 --> 00:45:16,440 Speaker 1: then sold it for three d thirty million dollars less 780 00:45:16,440 --> 00:45:18,319 Speaker 1: than two years later. And that's not even touching that 781 00:45:18,360 --> 00:45:21,399 Speaker 1: four hundred thirty six million dollars of debt that earth 782 00:45:21,400 --> 00:45:25,960 Speaker 1: Link had accrued. So that is that's a yikes. But 783 00:45:26,160 --> 00:45:29,880 Speaker 1: earth Link does still exist. According to the company's website, 784 00:45:29,880 --> 00:45:34,080 Speaker 1: it quote offers internet access, premium email, web hosting, and 785 00:45:34,120 --> 00:45:37,680 Speaker 1: privacy and data security products and services to customers throughout 786 00:45:37,719 --> 00:45:41,120 Speaker 1: the United States. Earth Link also has key partner relationships 787 00:45:41,160 --> 00:45:44,320 Speaker 1: with several of the nation's largest providers, enabling the company 788 00:45:44,360 --> 00:45:47,440 Speaker 1: to offer products and connectivity services available to millions of 789 00:45:47,480 --> 00:45:52,160 Speaker 1: households nationwide. End quote, it still offers residential and business 790 00:45:52,200 --> 00:45:55,560 Speaker 1: internet access. It has also partnered with companies like Norton 791 00:45:55,680 --> 00:46:00,040 Speaker 1: to offer data privacy security options, and it all so 792 00:46:00,160 --> 00:46:03,720 Speaker 1: offers digital marketing solutions to businesses. So it's a company 793 00:46:03,760 --> 00:46:09,440 Speaker 1: that is pairing other services with Internet service provider services. 794 00:46:09,440 --> 00:46:13,279 Speaker 1: So it's kind of it's it's sales pitches that yes, 795 00:46:13,400 --> 00:46:16,400 Speaker 1: you can get I s P connectivity through other companies, 796 00:46:16,440 --> 00:46:20,719 Speaker 1: but we are also providing these other complementary services to 797 00:46:21,680 --> 00:46:26,960 Speaker 1: connecting to the Internet that will make your connection more better. Meanwhile, 798 00:46:27,360 --> 00:46:29,920 Speaker 1: we have seen crazy consolidation in the I s P 799 00:46:30,040 --> 00:46:32,880 Speaker 1: market here in the United States. In many areas in 800 00:46:32,920 --> 00:46:37,959 Speaker 1: the US, residents and businesses might only have maybe two 801 00:46:38,040 --> 00:46:41,520 Speaker 1: choices in providers. Some are unlucky enough to have no 802 00:46:41,640 --> 00:46:45,239 Speaker 1: real choice at all, particularly if you want broadband. There 803 00:46:45,280 --> 00:46:48,759 Speaker 1: are still smaller third party i sp s here, they 804 00:46:48,800 --> 00:46:52,600 Speaker 1: do still exist, like earth Link, but these companies often 805 00:46:52,640 --> 00:46:54,759 Speaker 1: have rates that are pretty much the same as what 806 00:46:54,800 --> 00:46:57,759 Speaker 1: you're gonna find with the big providers, and they are 807 00:46:58,040 --> 00:47:02,279 Speaker 1: typically leasing lines off from those big providers anyway, So 808 00:47:02,840 --> 00:47:06,360 Speaker 1: even though you are subscribing to you know, regional I 809 00:47:06,600 --> 00:47:11,200 Speaker 1: s P A, they're still using the pipes that are 810 00:47:11,239 --> 00:47:17,680 Speaker 1: controlled by the giant, multi multinational, multibillion dollar I s 811 00:47:17,719 --> 00:47:21,880 Speaker 1: P company Mega Corporation. So a lot of people just say, well, 812 00:47:21,880 --> 00:47:24,200 Speaker 1: why don't I just go ahead and subscribe with the 813 00:47:24,239 --> 00:47:27,719 Speaker 1: mega corporation and cut out the middleman. Uh. And a 814 00:47:27,719 --> 00:47:31,080 Speaker 1: lot of this ties back to the concept of net neutrality. 815 00:47:31,160 --> 00:47:33,919 Speaker 1: It's a concept that has been battered pretty hard over 816 00:47:33,960 --> 00:47:37,960 Speaker 1: the recent past. It'll be interesting to see where net 817 00:47:37,960 --> 00:47:41,839 Speaker 1: neutrality heads next because we have a different administration coming 818 00:47:41,840 --> 00:47:45,640 Speaker 1: into the United States. So I'm sure I'll be doing 819 00:47:45,680 --> 00:47:49,399 Speaker 1: more episodes about net neutrality and talking about its ups 820 00:47:49,440 --> 00:47:53,120 Speaker 1: and downs. Uh. That's something I'm looking forward to. But 821 00:47:53,200 --> 00:47:57,080 Speaker 1: we have now come to the close of earth Links story, 822 00:47:57,560 --> 00:47:59,840 Speaker 1: and I hope that this was interesting to you. I 823 00:48:00,000 --> 00:48:02,200 Speaker 1: know that I use this story really to talk about 824 00:48:02,239 --> 00:48:05,319 Speaker 1: a lot of other stuff, like how dial up modems work, 825 00:48:05,320 --> 00:48:08,719 Speaker 1: how cable modems work, how DSL works. But that's kind 826 00:48:08,719 --> 00:48:11,040 Speaker 1: of the way I like to sneak in the tech 827 00:48:11,120 --> 00:48:15,239 Speaker 1: information is through the context of a bigger story, and 828 00:48:15,360 --> 00:48:19,360 Speaker 1: all of those elements were incredibly important parts of earth 829 00:48:19,400 --> 00:48:22,520 Speaker 1: Links story as well. I plan on doing some more 830 00:48:22,560 --> 00:48:25,040 Speaker 1: episodes about things like the consolidation of the I s 831 00:48:25,080 --> 00:48:29,480 Speaker 1: P business and how that has affected, uh, the Internet 832 00:48:29,520 --> 00:48:32,880 Speaker 1: in general and specifically within the United States, because I 833 00:48:32,920 --> 00:48:36,279 Speaker 1: think that that's that's a really complicated story that we 834 00:48:36,360 --> 00:48:38,440 Speaker 1: really need to take a closer look at. It's stuff 835 00:48:38,480 --> 00:48:40,840 Speaker 1: that just kind of happened over the course of our lives. 836 00:48:41,360 --> 00:48:45,960 Speaker 1: But when you start unraveling what the implications are, you 837 00:48:46,000 --> 00:48:50,480 Speaker 1: start to see potential huge problems. So we'll probably do 838 00:48:50,560 --> 00:48:53,200 Speaker 1: some more episodes about that as well. But those are 839 00:48:53,280 --> 00:48:55,640 Speaker 1: my thoughts. I'm curious to hear what you guys have 840 00:48:55,719 --> 00:48:58,440 Speaker 1: to say, especially if you have any ideas for future 841 00:48:58,520 --> 00:49:01,520 Speaker 1: episodes of tech Stuff, So reach out to me. The 842 00:49:01,560 --> 00:49:04,480 Speaker 1: best way is on Twitter. The handle is tech stuff 843 00:49:04,680 --> 00:49:07,000 Speaker 1: hs W. Let me know if there are any topics 844 00:49:07,000 --> 00:49:09,320 Speaker 1: you want me to cover. You got any questions about tech, 845 00:49:09,880 --> 00:49:11,799 Speaker 1: Maybe there's a trend in tech you would like me 846 00:49:11,880 --> 00:49:14,279 Speaker 1: to talk about. Hit me up and I'll talk to 847 00:49:14,360 --> 00:49:22,520 Speaker 1: you again really soon. Tech Stuff is an I Heart 848 00:49:22,600 --> 00:49:26,359 Speaker 1: Radio production. For more podcasts from my Heart Radio, visit 849 00:49:26,400 --> 00:49:29,480 Speaker 1: the i Heart Radio app, Apple Podcasts, or wherever you 850 00:49:29,560 --> 00:49:30,880 Speaker 1: listen to your favorite shows.