COOK Report: What got you into the Internet services business?
Jennings: I never really did decide to do it. It just sort of happened. The Little Garden started before I did. John Gilmore (formerly of Sun Microsystems and EFF Board member), John Romke (Unix wizard and first person to connect a toaster to a network) and Steve Crocker (of Trusted Information Systems) all said "gee, I bet we could get on the Internet for less than five grand." This was around 1990 - 1991.
So they strung together some hardware - it cost them ten grand of course - and got either a 56 kbps or fractional T-1 connection to UUNET. Because the $1,000 a month charge was expensive, Rick Adams allowed them to split the cost three ways. The original e-mail said essentially I don't care what you guys do; Just don't cause me a lot of support grief" - a reasonable answer all things considered.
COOK Report: We have heard that concerns about having to provide unreasonable amounts of support are one of the reasons that some providers don't want resellers.
Jennings: Well that's a crock. Because what you simply say is Trusted Information Systems is our customer. We will only accept calls from them. If people downstream of TIS, like Gilmore, have trouble, they have to work it out with TIS. All there needs to be is a single point of contact for the Alternet service. Little Garden has resellers going two and three deep now. We do occasionally get calls from people who don't realize the hierarchy and we gently point them back to the appropriate level.
So to get back to the story, they had the leased line from UUNET to TIS in Mountain View, and from there a 56 kbps line went to an apartment in Palo Alto where Cygnus Support was located. Cygnus started out by renting an apartment and, as they needed more space, they rented more apartments in the same complex and ran Ethernet between them. Then John also ran a 56 kbps line from the apartments to his San Francisco house - otherwise known as Toad Hall and on the net as toad.com.
Over the next year or so they connected a bunch of friends and co-conspirators: Rich Morin, Kenton Hoover, Tim Pozar and Ed Elhauge. These were all connected as 9600 baud dial-up sites. For routers they were using a bunch of PCs running NOS with Phil Karn's KA9Q protocol. It was all very kludgy and unreliable. And for a while it was quite stable at six to eight users and I don't think Rick Adams even knew what we were doing or, had he known, that he would have cared.
But by late 1992 or early 1993, John Gilmore started to get expansionist ideas about the Little Garden - which, by the way, is named after a Chinese restaurant in Palo Alto. John's ideas had to do with the behavior of the commercial Internet people who appeared to be reluctant to do whatever had to be done to drive down the cost of connectivity to the network. Gilmore wanted to use what we had developed in Little Garden to enable as many small people to get on the net as we possibly could. So in 1992 we did add some more people but not very many because most of us had other full time jobs and doing our home brew networking was time consuming.
COOK Report: Would it be fair in those days to describe it as a hackers' network - par excellence?
Jennings: Oh absolutely! It served people's needs. They came up with numbers. Originally a thousand dollars a month. The original three split the cost of the thousand dollars three ways. When they added the modem sites they did some back-of-the-napkin arithmetic and said lets call the dial up charges $70 a month. We have added some charges for phone line costs but are still basically using these figures. COOK Report: Your are getting more people involved. Are you increasing your usage with UUNET?
Jennings: They measured your usage. If it stayed below a very conservative average, they billed you at one rate. When it went above it for more than 30 days they billed you at the next higher rate.
COOK Report: You were able to do a good deal of growing before you ran into that fixed cost rate ceiling?
Jennings: Oh yeah. We are still playing that game as is everyone else in the Internet. You have to buy capacity that you aren't using yet. But what happens is that you can get up fairly high in your load to feed before performance starts to deteriorate. But by then you have the cash flow to pay for the next upgrade. By late 1992 there began to be a lot of folk who wanted to come on board Little Garden. However, none of the founding parties had the time to accommodate them. I was still doing my big drop out thing. (Whatever happens after this it will not be a technology job. It makes me really nuts.) I was basically living on no money.
COOK Report: So after Fido you went into a period of quiescence?
Jennings: It happened actually halfway through the Fido thing, which was fortuitous because people just kept mailing me checks. At its peak, Fido grossed $30,000 one year as shareware. At that time, I wasn't living on much money. I had been at Cygnus for a month and didn't like it. It was not their fault. It was just that Palo Alto makes me really nuts.
Some time in late `92, John Gilmore and I worked out a plan. He said to me: we have this network thing and you can get a free connection out of this, and maintain the network and we'll start charging people at the current $70 a month; in exchange for the work I'd keep some of the money according to this algorithm we came up with. $70 paid for a full time 9,600 baud modem based SLIP connection.
COOK Report: This was something that you could run with a Netblazer?
Jennings: Yes, but at the time we were doing it even more simply using NOS on the router end and a modem port on the customer end. When I started, the network support situation was all too casual. NOS boxes died all the time, and, if there was no one around to tend to it, the box just stayed down until someone was available. But everybody was really laid back because $70 a month for full time net connection was absolutely unheard of.
So the deal was, I'd handle maintenance, in exchange I got to not have a job and got to make another $400 a month. I started this in October of 1992. By July or August of 1993 it was up to a grand total of $700. Then we worked out what it cost to buy a NOS box and the related stuff and I charged people $250 to install plus $70 a month. Borrowing $800 from John Gilmore I got one machine ahead.
COOK Report: You were making these in your bedroom so to speak?
Jennings: Yeah. When I did four installs, I had $1000 and the machines, which were 386 SXs, 16 megahertz, one megabyte of memory and one floppy- cost $800. A really minimal configuration because NOS did all its work out of memory. Consequently, I had $200 left over for cables, X-10 power cubes and other stuff.
KA9Q is fine software, but we were abusing it - abusing it hard by attempting to use it in embedded remote circumstances for which it was really not designed. For a client machine on your desktop it was great. If you just had a DOS machine with 640k, one floppy and a modem, you could do everything on it - DNS, FTP, SMTP mail. But we weren't using any of that. We were using only the router functions.
COOK Report: Do you view what you were doing as a means of low cost leveraging of the Fido community onto the Internet?
Jennings: No, because it still hasn't done that. The knowledge entry level is still too high. Unless you are already part of the university/military/industrial complex you could not get adequate knowledge of how to get the stuff set up - no matter how much hardware you had.
COOK Report: Well, whatever the motive, it sounds like you were offering network connectivity for a fraction of what it would cost from a standard commercial organization.
Jennings: Yes, to a certain extent that is true. There was also the fact that it was not a "real job" which was still a requirement and is actually increasingly a requirement for me. And it was certainly not harmful. It's hard enough to do to find some way of making money that isn't harmful.
COOK Report: So by the fall of 1993 then you are providing a suite of services using devices similar to Netblazers (but considerably cheaper than those products) to attach people to the Internet? What was the next logical development?
Jennings: Well there was a lot of nasty earlier detail. By the spring of `93 we were up to 15 to 20 sites. Reliability was going up. If a machine crashed, within hours I'd usually have it up again. We were developing accountability, documentation and billing. During this time Gilmore said to Rick Adams every now and then: there's been no real policy on how we use our connection to you, is our expansion OK? Rick never responded to John's questions. It was like he wasn't getting the messages. At this point Steve Crocker and TIS were getting really nervous. We have a mail list for all our customers. Rick Adams was also on this list. Discussion of whether we were now reselling in a way that UUNET would not approve of started spilling onto the mailing list. Eventually it came to a head, with Gilmore pushing Adams for an answer as to what was OK, what was not. The only unambiguous answer we got was finally: find another service provider please.
COOK Report: How much time did he give you?
Jennings: Oh, no time limit was put on it. We figured that as long as we were making a genuine effort we shouldn't worry about it. And Rick, to his credit, never pushed. We really did make a concerted effort and found that it only took six months. We looked around. We were really naive. We visited Bill Yundt at BARRnet. When we told him we were charging $70 a month and generating positive income, his jaw dropped. He offered to absorb us laterally. We went home and realized we wouldn't get anything out of it. So we said, thanks but no thanks. If all we had wanted was for our 15 or 20 users to stay connected it might have been OK. But that is not what we wanted. We had more activist plans.
So we continued to hunt around, and this is where Randy Bush comes into the story. I had known him for about ten years in working on the Fidonet stuff. He has done this broad-based, international networking for a long time. He had stumbled onto Fidonet on his own and saw it as yet another tool to take networking into far away places. Randy wrote proper documentation for the Fidonet protocols in `85.
It turned out that when we started looking for this service-provider, so was he. He's had an 56 kbps Internet connection for a long time because of all the stuff he does for NSF.
This was at the end of the summer of 1993 when this Little Garden thing was heating up and becoming this big god-damned monstrosity that it is today - something that sucks up all my time and energy. But at any rate, to get back to the story, we started searching through all the service providers and found out that they wouldn't even talk to us. Eventually we finally talked to Sprint in the Government Systems Division where Randy knew some folks.
We ended up going with Sprint to whom we immediately said we will want to resell. Sprint said you can do what you want with the connection. So we put orders through starting in October of last year and went online with them in November. We transferred from Alternet to Sprint as a T-1 customer with an outage of no more than ten minutes.
The next months were just a blur as we connected a tremendous amount of customers. Except for a single $10,000 loan, the whole thing has been cash driven. We also got a whole bunch of $70 a month members to pay for a year's service in advance. That we saw as a nice vote of trust.
COOK Report: Well these people could vote in part because they were now getting a whole new level of reliable professional service?
Jennings: Oh yeah. The modem technology had changed in very desirable ways. One thing I brought with me from the Fidonet world is all the modem stuff. I can make modems work in my sleep. So making modems work was no problem. Compared to BARRnet we were small and flexible. So people were putting up $1500 for the first year's service with the reasonable assurance that we'd be around at year's end. Moreover we were now also going to be accountable. You can call me up. I will make that thing work. We'd buy better hardware including a Livingston router. We'd have real CSUs an DSUs - all that kind of stuff. We'd provide customers with a better billing system. The real flow of steady hook-ups started in January 1994 and has been steady ever since.
We started with a POP (Point of Presence) in San Francisco, a 40 mile leased line to Cygnus in Mountain View, and a couple of borrowed routers at each end. The staff was primarily me, but Tim Pozar did a tremendous amount of work, though he had a real job as a radio station engineer. So the last six months have been pretty standard start up stuff. Employees. Office space. All that. But unlike the standard startup we grow at 20 percent per month and have had 25 percent months.
COOK Report: So you have an adequate cash flow?
Jennings: Oh yes, quite. The growth curve is not exactly a straight line actually. It is lumpy as hell in fact. We had an incredible swell of new orders in September and October.
COOK Report: Can you tell us how your services work organizationally? For example Santa Cruz Network. They are a customer?
Jennings: Yes. They are actually a medium to large customer. We had been talking to them since the summer of 1993 to determine what form we wanted to take. Were we going to be a cooperative? This word was used a lot. But I have worked around co-ops and let me tell you, this was never a co-op with a capital "c."
COOK Report: How formally are you organized? Do you have detailed contracts or word-of-mouth and a handshake?
Jennings: Initially it was word of mouth and a handshake. But we have been putting things in writing as we go along. We have a decent and amusing Terms and Agreements document. I should e-mail it to you. We set out to do there what we never got from Alternet, which is to make explicit what you can and cannot do, as well as what you get and don't get. We want to make it clear first of all that we are putting no limitations whatsoever on the use of the line. You may resell and pass on that ability to resell or not.
COOK Report: What happens when someone down stream needs support? What if it is a customer of one of your resellers?
Jennings: We support our direct customers only. If our customers have customers, they are their responsibility. We, of course, answer reasonable questions and our online docs are free for all, but we don't provide support for down-stream sites.
COOK Report: How has your link with Randy Bush evolved in the last year? Is he doing a similar thing in Oregon?
Jennings: Well, he is doing a similar thing in Portland. We figured at the very least that we will share our experiences and pool our resources where possible.
We will continue the no use restrictions. We have already run into people who buy connections from us and resell in our own area. The paradox that terrified Alternet and all the rest of them, we just deal with and thrive on. The new model works to some gigantic degree and by God we'll continue with it. I think that if Sprint and MCI come in and do a bad job, you'll always be able to go around them.
COOK Report: How about your prices? What If I wanted 56 kbps?
Jennings: It varies according to the class of service. All our prices are on-line in writing. There are no hidden costs. You must buy your own hardware on your side and pay a monthly charge plus an install price. A 56kbps leased line based service is $325 a month. 56kbps frame relay is $285 a month and virtual T-1 is $800 a month. There we are trying to maintain a three or four to one ratio of load to feed. Right now we have two T-1s into Sprint and four additional lines into MCI.
COOK Report: Depending on our physical location, if we were in California and thinking of becoming a customer, we'd have to pay for a local loop from our router to your nearest point of presence (POP). Right?
Jennings: Every local area is different. In the Bay area LATA you basically go by the mile. Rates are also going to change January 1 and go way up. They are allowing dial tone competition and PAC Bell has had artificially low prices for residential monthly bills. The monthly will probably double and the leased line prices are going to go up but the cost of calls intra-LATA are going to go way down. Right now a call to San Jose, 50 miles away, costs 27 cents a minute where a call to Boston is 22 to 24 cents a minute. However, in the Bay area you can get T1 frame relay service for a flat $667 a month from the Oregon border to south of San Jose and almost to Sacramento. If you are two or three miles from one of our POPs you are better off with a leased line. However, if you are more than five miles away, the frame relay service is a bargain.
We also offer a 56kbps frame relay service at low committed information rates (CIR) for $90 a month. The telco's full name for it is 56kbps Local Loop Frame Relay 19.2 kilobaud CIR. This means that if the network gets crowded, your 56 Kbps service can slow down to a very reasonable 19.2 kilobaud. It also means that for $210 total end to end costs (our prices and the local loop) you can have this service. We are delivering it now and it works great! We have it down to $800 on the customer end for the needed equipment.
The T-1 stuff is really good. We have a whole bunch of resellers with T-1 feeds, both frame relay and leased line. We are also working on what we are calling a maximum T-1, which is our name for a T-1 to the national service provider maintained and backed up by us and unshared by anyone else. This would be in the range of $2,500 to $3,500 a month. It is expensive but still cheaper than Alternet, which for the equivalent service wants about $7,000 a month!
COOK Report: How does this compare with BARRnet?
Jennings: BARRnet has always had screwball pricing. It depends on who you are.
COOK Report: Well, with BBN buying them out and coming into your area, we have the impression that they will be serving corporate customers - very often large - who feel comfortable if they work with suits. That these customers expect high reliability and, all other things seeming to be somewhat equal, will prefer working only with "suits." While customers who are very technical in nature and are interested in cost as well as reliability will remain as your very major market base.
Jennings: To some degree that's true. However, we had one customer who was very "corporate" in nature. They are also supplying very corporate customers. They came to us and were a little hesitant at first. But a few months later they came back and said: to tell you the truth when we originally got a connection with the Little Garden we thought we'd be doing so just to get started inexpensively. Soon we'd have the where-with-all to move on to a "real" service provider. And they found that not only were the prices good, the service was fine and when they wanted to move on they found they couldn't because no one else would allow them to resell. So they are still with us.
We find that some things from our Old Days scale work well and some don't. Fully one half to one third of our daily work was involved in domain name service stuff. But then we realized we were not doing it efficiently. We saw that we had given people free rein to do any damn crazy kind of thing they thought of. It was causing us a huge amount of support problems. Consequently we just massively tightened in on what we allow and what we don't.
COOK Report: How do you expect the current CIX donnybrook to effect you?
Jennings: We don't. But if it does we may have to pay the monthly extortion fee until they dry up and go away, or maybe do something useful for members. (We are in fact a paid-up CIX member.)
COOK Report: OK. But since you are a Sprint customer, Sprint seems to indicate that they can take you pretty much any where in the Internet that you need to get to. Aren't you confident of their ability to deliver?
Jennings: Yes, but if something unexpected happened and our packets couldn't get through, we'd probably have no choice but to pay the fee. No matter how much noise comes out of it, joining CIX is simply a business decision: is it a benefit or not? All it's ever been is: "if I am in the internetworking business, is it a wise decision to make my networking more attractive to join the CIX?"
COOK Report: It seems to us that there has been a lot of confusion about what you do actually get when you join the CIX.
Jennings: Yeah. People have actually run wires into the CIX thinking that it was going to be their service provider. You either learn or you don't. But they never went out of the way to tell people who did this the significance of what they were doing. You would have thought it might be polite to say: "Excuse me but do you have another point of connection? You might really want to have some one else as well." Oh well. That's one thing beyond our control.
COOK Report: So the Little Garden connects to one or more Sprint POPs out on the West coast?
Jennings: That is essentially correct. All our research dating back over the past year has essentially indicated that the CIX interconnect does not get you anywhere that you can just as easily get to from somewhere else.
COOK Report: So are you going to maintain links into both Sprint and MCI?
Jennings: As long as it is a wise business decision to do so. And yes we do think it will be.
The Little Garden attn: Tom Jennings 3004 16th Street, STE 201 San Francisco, CA 94103 (415)487-1920 voice TomJ@worldpowersystems.com