Flexibility and the Question of Economics

By Popi Kleinman
November 1999

Case study from Fundación Ambiente y Recursos Naturales (FARN)

Should we, or should we not have an ISP (Internet Service Provider)?¹ First we have to look at the advantages of not having one, i.e., to function as our own Internet server. More freedom and flexibility, more opportunities to grow, to experiment and ultimately, to learn, etc., makes it more tempting to have our own server than to use an ISP with all of its limits. Why then, would we decide to have an ISP? We would prefer not to need it, but current circumstances make us dependent upon it.

First, the prospect of moving offices limits any investment of time that we may want to make. Is it worth it to invest time and money installing a system that will probably only last six months, a year at the most? This dilemma stops us from not only changing our connection to the Internet to a point-to-point connection, but also from trying to improve the present—and very precarious—network system. This was set up temporarily, precisely due to the subject of moving, which generates a series of problems that we are trying to resolve. All our efforts and energy are directed then to resolving this situation before trying to change the type of Internet connection; it is well known that in order to function properly externally, we need to function internally. It is also well known that in order to plan a change in the system it is necessary to dedicate much time and effort, a task that is difficult at the moment due to our small staff.

Second, there's the question of economics. Even if we were to solve the moving problem and our network problem, it would still be very difficult due to high costs to change the connection and then maintain it. On one hand, we have the connection set-up plus the monthly fee for connection services; and on the other, the costs of installation and configuration of the operating system and required software for e-mail and Web site administration (after acquiring the equipment), and system maintenance so that it will function correctly. The approximate costs are as follows:

• Connection installation: US$1500
• Monthly connection fee: US$1600 (per month)
• New equipment: US$950
• Software and operating system installation: US$1000
• System maintenance: US$300 (per month)

This results in an approximate one-time fee of US$3450 plus US$1900 per month. With an ISP, the cost is considerably lower: around US$300 per month for phone and service provider (ISP) fees. Notwithstanding the US$3450 for installation, US$1600 per month is a lot of money, almost decisive in this case.

Finally, if we analyze the benefits of having an ISP or not, obviously not having one is more beneficial because it implies not having to depend on anyone but ourselves. However, let's agree that, for our current needs, the services that an ISP provides are useful. Moreover, at least our ISP allows us to install scripts or programs required, which gives us a certain degree of freedom.

If we weigh the costs and benefits of both options, using our ability and current needs as a measuring stick, it is, in the end, more important to have an ISP. This does not mean such will always be the case. Perhaps in the future we can operate our own server, perhaps due to lower prices, or because our growth will be such (and we hope this will be the case) that our needs will compensate for the high costs of direct connection services.

Footnotes

1. Technically, in Argentina, Internet connection to private individuals, public or private organization is always through an ISP, as by law they are the only ones who can connect directly to Telintar (the company that provides international connection in Argentina). Nevertheless, here we are referring to an ISP not as an Internet provider, but rather as a provider of guest-service type, e-mail administration and discussion lists, etc. Requiring these services forces us to have a point-to-point connection instead of dial-up, which is what we currently have.