. Last Updated: 07/27/2016

Netcom Outage Presages Future Jams

PALO ALTO, California -- Netcom On-Line Communication Services Inc.'s network-wide outage this week serves as a warning sign of the difficulties even the largest Internet service providers face in meeting soaring growth rates.

The Internet access provider said the outage -- which lasted more than 13 hours, including the "prime time" for home usage Tuesday evening -- was repaired overnight, but acknowledged it was an embarrassment which could hurt its reputation.

Internet experts predict that such blackouts and brownouts -- one Netcom official referred to it as a "speed bump on the information superhighway" -- will become more common.

With more than 400,000 subscribers, Netcom is the largest of the so-called Internet-only service providers in the country, and the company is responding to mounting pressure from new rivals with even more aggressive growth plans.

"There's so much market growth that there's room for a number of competitors," said Netcom Chairman David Garrison. "The business is growing so rapidly, we think there will be a lot of competitors."

Market research by San Francisco-based Hambrecht & Quist projects that demand for network services "will be seemingly insatiable for the foreseeable future," with the number of e-mail targets on the Internet rising tenfold to 300 million within five years.

Telephone giant AT&T Corp. in late February launched its WorldNet Internet access service, providing unlimited use for $19.95 a month, and already has shipped 300,000 copies to make it the No. 2 provider.

Furthermore, traditional consumer online services such as America Online Inc. and Microsoft Corp.'s 10-month-old Microsoft Network provide Internet access for more than 5 million and 1 million subscribers, respectively.