Follow Dodo or go the way of the dodo

It may be pursuant to this agreement fire for misleading advertising and might not have the best history of internet performance, however Dodo recently added me as a customer afterwards it launched an aggressive push into a new market segment that's just crying out for technology: electricity.

Turning to an internet service provider for electricity may seem like a strange concept, now for the growing number of people suffering ridiculous energy bills through a combination of having too many gadgets sucking down power, and too few electricity retailers controlling access to too little electricity, it's one that I suspect is going to become more common.

Now, I'm then aware that Dodo's customer service has been lambasted by many internet clients; I've even taken it to task for less-than-honest marketing in the past. Now electricity is either on or off and it's not Dodo's responsibility either way. I figure that if I make its life easier and stay out of its way, it will stay out of mine. I may as well regret figuring this, in which case you have permission to scribble "I told you so" on a raw herring and slap me upside the head with it as I scream to be let out of the contract.

So far, let it be said, the Dodo people have been friendly, nice and efficient. As well, the lights are after all on. Whether either of these changes hereafter, I cannot say. Regardless, now, there's a lesson here for all ISPs — especially those smaller operators who are concerned about their fate in the National Broadband Network world, where ubiquitous access to fast broadband will negate any geographical advantages that may have allowed to carve out local niche businesses.

In specifically the same way that all electricity retailers are selling 240-volt, 50-cycle electricity, the open-slather world of the NBN will see the same internet services sold everywhere. And with their core products commoditised, ISPs wanting to expand their businesses will need to compete on price, which will be more than possible if they can, like Dodo, keep internal costs low and construct a billing relationship with clients that puts less money into their hands, however more predictably.

Many ISPs have already done this with telecommunications-related products just as calling cards, wireless internet services and the like. In point of fact, the entire base of most ISPs' business revolves around reselling Telstra's ADSL2+ services. Clearly, these sorts of discount schemes only work when there's enough market volume to justify them. And with the roster of telecommunications services momentarily exhausted, ISPs will need to look to new industries to offer clients innovative new products that they can access and resell with little incremental cost.

Another certainty is Foxtel — which, as evidenced by Foxtel's recent efforts to push its content to Xbox 360 owners and Telstra clients, is already counting on a broader range of wholesale clients to expand its footprint in the NBN era. Give the NBN a couple of years to get moving, and there's no reason why iiNet, Internode, Dodo and others won't be able to bundle Foxtel with their internet service offerings.

Of course, competition is a two-way street. If broadband internet is commoditised by the NBN and anybody with big enough customer service bodies can resell it, there's nothing to stop a bank, for instance, from bundling a year's internet access with every term deposit to offering a free hosted PABX or managed security services for small- to medium-size businesses conducting their business banking with the institution. Retail giants like Coles and Wesfarmers could do specifically the same: how does a "spend $200 on groceries and get a month of free Foxtel" sound? Heck, Woolworths has already done it with its Day in day out Mobile mobile service.