At the end of 2014 AOL still claims to have 2.3 million paying dial-up customers. That is obviously way down from their peak when they had 126 million customers, but it’s still a very impressive number. AOL said those customers account for $155 million in revenue, which still exceeds the company’s next biggest revenue source which is advertising at $144 million.
AOL is not the only one still in the business. Some other big names from the past are still around like EarthLink and NetZero. EarthLink advertises that it has the most dial-in numbers in major markets like 50 in Miami and 45 in San Diego. And then there are dial-up companies that you probably never have heard of including Basic ISP, Toast.net, Turbo USA and Copper.net. Finally, many telephone companies like AT&T still offer dial-up. A surprising number of my smaller telco clients also still operate small pockets of dial-up customers.
It’s hard to get industry figures since most of these companies don’t publish their customer counts, but if AOL still has 2.3 million customer then nationwide there must be more than 4 million households still using dial-up. The FCC says that about 2% of households are still on dial-up, but AOL alone is slightly more than 2%.
Dial-up has gotten better than what most of us remember due to the use of compression techniques where the ISP will compress whatever is being sent to the dial-up customer. But it’s still agonizingly slow compared to other broadband and the realized speed of dial-up is still capped at 56 kbps on good copper. And much of the copper that is left is not very good. With compression techniques dial-up can appear to be twice that base speed.
The low speeds keep dial-up customers relegated to using very basic Internet functions such as email. Browsing the web can be incredibly slow since many website now include advertising and video and take a long time to open. Since shopping on the web is now very image oriented that can also be too slow for dial-up speeds. And obviously dial-up households can’t get streaming video of any kind since it requires anywhere from steady 1 Mbps at the lowest quality up to 6 – 8 Mbps for the new 4K HD video.
So who is still using dial-up? It appears that there are three distinct communities. First are people everywhere who barely use the Internet and want the cheapest connection possible. Such people don’t do a lot more than check email and do basic tasks. Second is in immigrant communities where one would suppose that the low price is also important.
Finally are rural people who have no other alternative except maybe satellite. For those who have never used it, satellite broadband is not a great product. It’s very expensive with base plans between $60 and $80 per month. It is faster than dial-up, but it still has latency issues which make it hard to use for any real time purposes such as web voice or streaming video. It also comes with low and strict ceilings on monthly data usage. WildBlue has a monthly cap of 17 GB in total downloads, HughesNet is 20 GB, Exede is 25 GB and Dish is 30 GB.
One would think that if AT&T is really able to cut down millions of rural copper lines like they want that a lot of dial-up customers will disappear. All of those rural houses that use dial-up today as their most affordable option will end up with either satellite or cellphone data plans.
Writing this blog made me pause to marvel at how fast our technologies change and grow. The heyday of dial-up was only twenty years ago, and we have come so far since then. We think of dial-up as something ancient and yet twenty years is nothing in terms of mankind’s history. But in that very short time we have grown from having over half of the country on dial-up to seeing some cities connected with gigabit speeds. I remember when I was on dial-up and I envied a few of my friends who were on a shared T1 at their office. I would have called somebody crazy if they said then that within twenty years that people would be able to get a gigabit at their house.