March 11, 1997 2:00 PM ET
Smaller ISPs face cloudy future, BBN exec says
By Sean Silverthorne

  BURLINGAME, Calif.--The smallest of the nation's 3,000 ISPs will come under increasing pressure as customers demand technological improvements they can't provide, said the chief of one the country's largest network access providers.

"Competition will take a toll on smaller ISPs [Internet service providers]," said George Conrades, CEO of BBN Corp., based in Cambridge, Mass. That's because customers are increasingly demanding more than just basic access, including security enhancements, Web-site hosting and end-to-end solutions. Smaller ISPs won't be able to provide those as quickly as larger organizations, Conrades said.

Some ISPs will get swept up in the industry consolidation that has already begun. Others "will simply disappear because they can't keep up with technological changes," he said.

Conrades, who before taking the helm at BBN spent 30 years at IBM, delivered the keynote address at Technologic Partners' Network Outlook conference here this morning.

In other remarks, Conrades said that while America Online Inc. and other service providers have been criticized for not keeping up with Internet access demand, the problem also must be solved by telephone companies and "backbone" providers, which need to add more circuit capacity to handle the demand.

The Internet has passed the point of no return as a business tool, Conrades said. "There is no doubt in my mind that the Internet is here to stay," he said, adding that traffic on BBN's networks doubles every four months.

The next challenge for companies is to learn how to use the Internet to improve their operations and connect with customers, added Conrades.

Asked about so-called "parallel Internets"--new high-speed networks being built by MCI Communications Corp. and others for customers--Conrades said the Internet is growing so quickly that it will continue to serve the needs of most users.

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