Building and Delivering the Virtual World: Commercializing Services for Internet Access

This study analyzes the service offerings of Internet Service Providers (ISPs), the commercial suppliers of Internet access in the United States. It presents data on the services of 2089 ISPs in the summer of 1998. By this time, the Internet access industry had undergone its first wave of entry and many ISPs had begun to offer services other than basic access. This paper develops an Internet access industry product code which classifies these services. Significant heterogeneity across ISPs is found in the propensity to offer these services, a pattern with an unconditional urban/rural difference. Most of the explained variance in behavior arises from firm-specific factors, with only weak evidence of location-specific factors for some services. These findings provide a window to the variety of approaches taken to build viable businesses organizations, a vital structural feature of this young market.