Cooperative Internet Service Providers

International Anti-Copyright © 1996 by matt chisholm
University of California at Santa Cruz
The Idea and Practice of Cooperation
Community Studies 42-D
Final Project
June 6, 1996 A.D.

The following is a study of Cooperative Internet Service Providers, what they do, how many exist, how they are organized, what laws apply to them, and what should be considered when starting one of your own. This is a technical subject and I am not going to explain all the terms and technologies that go with the internet. A more extensive knowledge of these technologies than I can present briefly would be required in order to start an internet collective.

An Internet Service Provider (ISP) is an organization that provides access to the internet to it's customers. Generally, an ISP has one or more server computers connected to the Internet, and users can connect to the "host" computer from personal computers at home or in an office using a modem and a phone line. ISPs can provide access to e-mail, FTP, Gopher/WAIS, Usenet, Telnet, IRC and the World Wide Web. Some ISPs are large and provide phone numbers for access all over the country or world, and others are small and have only local phone numbers. CompuServe, or Prodigy are examples of large ISPs, and some small ISPs in Santa Cruz are SCRUZNET and CRUZIO.

The FCC has decided to implement a "Universal Service" policy regarding the internet. The policy was passed in Section 254 of the Telecommunications Act of 1996. The Act provides for government subsidies to local service providers in hopes of providing internet access to everyone. See below for partial text.

Section 501(c)3 of the Internal Revenue Code of 1986 is a tax status for nonprofit organizations. many of the Cooperative ISPs are a 501(c)(3) organizations, as well as NPTN and many freenets. See below for partial text.

The Cooperative Internet Service Providers that I found on the WWW are listed below. They are all very different. Usually you can find organizing principles, rules, membership costs and other information from their home pages.

Colorado Internet Cooperative Association
2525 Arapahoe Ave. Ste E4-235, Boulder CO 80306-6720,Voice & Fax 303-443-3786
Incorporated Jan 5, 1994. Operational Feb. 10, 1994. The coop provides only the most basic internet connection, designed for individuals with computer systems that will be connected 24 hours a day and who have the ability to set up their own mailboxes, use their own disk space for FTP and WWW space, and so on. Each server computer, is owned and maintained by a member, connected directly together under the domain "coop." Members pay monthly fees and must maintain their connection to the coop. Members pay according to the type of connection. Members can provide dialup SLIP/PPP access to locals with personal computers at their discretion. The coop is self sufficient so that it will not have to be subject to regulations or have funding suddenly revoked. President, Board of Directors, one member, one vote, annual meetings. No voting by proxy. CICA's three desires for service were: "1. Unrestricted data usage, 2. Highly Reliable 3. Low Cost." $119/month for "telco" access, plus estimated $1970 cost for startup.

Michigan Internet Cooperative Association
PO Box 40899 Redford, MI 48240 (810) 355-1438
Formed in 1995. 11 member board of directors appointed when created. Four elected officials report to the board. Provides both direct connection for servers and PPP/SLIP dialup connections. Members collectively maintain and repair the network.
Monthly rates: $40, 28.8Kbps to $500 for T1.

4125 Sunset Court, Ann Arbor, Mi. 48103
Began January 1991. Community ISP. Nonprofit organization under 501(c)(3), with no stock and no assets. Profit is not passed on to the members unless it is payment for services rendered. No government subsidies. Nonpolitical. Volunteer director. Offers free accounts to anyone. To become a member, dues are $6 a month or $60 a year. Members get complete SLIP/PPP internet access and one vote. Operating costs are approx. $350/month. or $4500/year to maintain the coop.

West Coast Cooperative Network
(604) 877-4708
Community ISP. President, board of 5 directors, yearly meetings. Members may own one, two or four shares, depending on level of service that they subscribe to. One member, one vote. Voting by proxy allowed. Profits are distributed to members. $50 - $200 one time membership fee ($50 per share).

Northern Colorado Internet Cooperative
305 West Magnolia Street #156, Fort Collins, Colorado 80521
Incorporated June 22, 1995. One member, one vote. Nonvoting stock ownership-one member, one share @ $100. Board of at least 3 directors elected for two years. Annual meeting. No voting by proxy. Not-for-profit. Allows reselling of connection by the members. Profit is distributed to the members. Monthly rates: $75 for 28.8Kbps, to $3100 for T1. $1000 to $5000 startup cost.

The Internet Project
PO Box 42 BELCONNEN ACT 2616 Australia
Comunity ISP. Membership open only to members of PCUG (ACT) (PC Users Group) and/or AUUG (Canberra Chapter) (Australia Unix Users Group). Cooperative venture between PCUG and AUUG. SLIP/PPP 100 hour/month free, $90/year for 300 hours/month(Australian dollars).

Katty-Meno Cooperative Society
Katto-Meny Coop. Soc. Tallberginkatu 1 / 39 00180 Helsinki, Finland
Community ISP. I presume FIM means Finnish currency. Members purchase one share for 250 FIM. Group account for corporations costs 150 FIM/month, personal account 50 FIM/month. 2 managers and 7 board members.

The Azure Cooperative
State College, Pennsylvania
The website was unclear about what exactly Azure provides.

Freenets are community ISPs that provide internet access for free. They are nonprofit and are financed by local corporations and government subsidies. They are similar in nature to PBS or NPR. Like PBS and NPR, freenets are not directly cooperative or member run, although they are volunteer-run and the members would have a great deal more influence than in a commercial ISP.

The National Public Telecomputing Network (NPTN) is a nonprofit organization dedicated to the development of public-access community computer systems. NPTN is associated with mostly freenets.

According to NPTN, "[Freenets] typically have required only $10,000 to $15,000 to launch, including the computing equipment and suite of server software applications provided by NPTN."
According to the Michiana Free-Net, "Free-Nets across the country estimate that their costs for telephone lines,
materials, equipment and staff are about $150,000 a year."
Grex claims that it's costs are about $4500 a year.
CICA proposes that costs will run $2500 a month and $10,000 to begin.
Costs include: Purchasing and maintenance of a server computer, server software, special phone lines, purchasing and maintenance of modems, uninteruptable electric power, and a place to house the server, and bananas for the monkeys that carry email messages. An ISP also needs administrative staff and system administrators to watch the activity on the server.

Growing Your Own Coop; from CICA FTP

Useful legal thingies:

The Telecommunications Act of 1996, (S652/HR1555 by Exon & Gorton) which was an amendment to the Communications Act of 1934, 47th U.S.C. As of June 3, 1996, available from
html or
ftp text
Relevant sections: 254, 102.
The Internal Revenue Code, Section 501: Tax exemption for Nonprofit organizations.
Relevant sections: 501(c)3

Here's the idealistic part. A cooperative Internet Service Provider need not be organized like a Credit Union or consumer cooperative, with a board of directors, president and officers elected by members to carry out the coop as if it were an ordinary ISP. An internet cooperative could instead be organized like a housing collective, with all members discussing policy and maintaining the system collectively. This requires a great deal of discussion and interpersonal contact, which is why consumer coops are not organized this way. But once the coop was online, members could discuss problems in a coop newsgroup or bulletin board, and hold weekly or monthly meetings in an IRC (chat) channel. Just like a housing cooperative. System Administrators could be chosen from the membership, and either employed full or part time, or on a volunteer basis. A cooperative organized like this would need to begin locally, but once established, could begin to help organize other cooperatives serving other areas.

Grex's policy of offering internet access to anyone and membership for a fee allows the internet to really be accessible to more people. The final stumbling block to internet access here is the requirement of having a computer. To really provide internet access to everyone, some terminals could be set up, open to the public, perhaps at the Point Of Presence, for anyone to access the internet. Perhaps local public schools and libraries could be cooperated with to combine services.

Some points to consider:
Should varied access br provided, from modem-dial-up access to access for organizations with their own computer? This question is effectively: should the collective be one of people, organizations, or both?
Qualifying for 501(c)3 Nonprofit status. There are some political restrictions on this status.
Qualifying for subsidy under Section 254 of the Telecommunications Act. There are some restrictions here too, for example, no member reselling of SLIP/PPP access, and government control of prices.
Operating a freenet is also a possiblilty.