700 ISPs?

Recently Scott McNealy, predicting consolidation in the ISP market, was quoted as saying that we no more needed 700 ISPs than we needed 700 electric power companies. That's an interesting analogy when you consider that the electric power industry, now approaching deregulation, is probably approaching 700 companies itself, many of whom don't even own power facilities.

As usually, Scott is being quotable. Realistically, as more detailed comments have indicated, it's the medium sized ISPs that are likely to consolidate. Smaller ISPs serve niche markets and personalized service that are not likely to be attacked by the larger players. I don't believe the numbers of small ISPs are likely to decrease, in fact, as I sit here after just having driven through the sparsely settled high-plains of Utah, I suspect that the market for small ISPs is far from saturated.

It's dangerous to judge the progression of the internet by the progression of businesses past. While it's true that in areas of high competition, the service and hardware requirements for an ISP are high. It is also true that in many areas, anyone with a leased line and a couple of modems can still become an ISP. While all eyes are turned towards the big IPOs, it's the small businesses that will keep the internet alive.