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Trusting The Net

AT&T and other providers hope to lure companies to E-commerce with service-level guarantees
By Clinton Wilder and Mary E. Thyfault
Issue date: Oct. 14, 1996

Is the Internet ready for prime-time business transactions? AT&T and several other service providers insist it is--and are offering service-level guarantees for Web servers and Internet links to back up that claim. But some users remain skeptical.

AT&T last week introduced a su ite of Internet commerce services headlined by SecureBuy Service, a Web catalog storefront and transaction processing package based on OM-Transact software from Open Market Inc. The kicker is AT&T's standard guarantee to refund some charges for the service if a sales transaction is lost or not completed. This money-back promise implies that the Internet--or at least the part that AT&T will use to process transactions--is now reliable enough for commerce. "We guarantee you'll never lose an order," crowed AT&T chairman Robert Allen at a news conference in New York to introduce the service, due to begin on Nov. 15. If users do lose an order, AT&T says it will reimburse them a maximum of the monthly SecureBuy service fee, which ranges from $395 to $595.

Allen maintains that SecureBuy has never been down. But one trial customer disputes that claim. Scott Rice, VP of uniforms maker Colorifics Inc. in Columbus, Ohio, says AT&T's server was down between midnight and 6 a.m. on Sept. 30. "It's technology, and there are going to be kinks," Rice says.

Corporate users, even those already using the Web to sell products, say it will take a lot more than guarantees to turn the Web into a completely reliable business network. "It's still kind of a scary thing. It's not like dial tone," says Chris Pizey, Webmaster at Universal Press Syndicate in Kansas City, Mo., which sells books on a Web site hosted by MCI. "It's good to see the big guys like AT&T and MCI coming in to help build the infrastructure, but it's still new. Anyone using it has to be flexible."

Other Web providers offer similar guarantees. MCI offers Net service-level guarantees, case by case. ANS, a unit of America Online, started offering a 99.5% reliability guarantee in July for the backbone of its virtual private network data service and an end-to-end guarantee, including the server, for its Web-hosting service. BBN, which carries most of AT&T's Net traffic, also recently announced a 99.9% backbone guarantee.

But these guarantees, like AT&T's, cover only the carrier's portion of the Internet. Nobody is guaranteeing that users who must navigate the hodgepodge of other Internet providers will be able to completely avoid delays or outages along the way. Some Net business users are unnerved by the potentially catastrophic effects of an extended outage, such as the one that stranded America Online's 6 million users for 19 hours on Aug. 7. Just last Friday, BBN's point of presence in Palo Alto, Calif., was brought down for most of the day by a power outage, leaving 400 businesses and organizations without service. AT&T's WorldNet Internet access service on the West Coast was also affected.

What about the online merchant that misses thousands of dollars in business because customers can't reach its site for whatever technical glitch? No Internet service-level guarantee covers compensatory damages. AT&T's guarantee doesn't even cover the customer's entire service costs; each user must pay AT&T an additional $29 5 a month charge for Web hosting.

"There's a big push right now from phone companies, bigger ISPs, and some banks to create a perception that the Internet is safe and reliable," says Torrey Byles, a director at Giga Information Group, a research company in Cambridge, Mass. "It's basically secure enough now, but reliability may not be there for a while longer."

The reliability challenge stems from the Internet's original design as a U.S. government pipeline, with no central hubs that could be attacked by an enemy seeking to bring down the entire network. In many cases, the chain that carries a transaction among many different ISPs is only as strong as its weakest link.

But as the Internet industry matures, carriers are starting to hold one another to higher standards. The Internet Engineering Task Force, for one, is developing performance guidelines by which carriers can measure one another. MCI has already started including a clause in its interconnection contracts that will require ISPs to meet f uture performance standards.

Meanwhile, the name of the game in Internet commerce is perception. AT&T is trying to lure cyber-businesses with its "Ma Bell" reputation. "If some little company were offering this, I wouldn't be as convinced," says Colorifics' Rice. Scott Williams, VP of IS for SecureBuy trial customer Lumi-Lite Candle Co. in Norwich, Ohio., concurs. "AT&T has the muscle and the resources to make it right," he says.

Still, AT&T's services--and the Net itself--have a lot to prove as reliable vehicles for commerce. For businesses seeking assurance about Internet commerce, service guarantees are a step in the right direction. But they're unlikely to sway perceptions overnight.

With additional reporting by Jeff Sweat

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