Case Overview: Pegasus (Australia)
by Karri Munn-Venn
(no longer a member of the APC)
Interviewed: Paul Wilson, firstname.lastname@example.org
Service Offerings prior to Privatization:
Current Service Offerings:
and Domain Name Hosting
of the Rainforest Information Centre, a prominent Australian
activist group, launched Pegasus in mid-1989. It provided
e-mail and conferencing to a broad cross-section of organizations
and individuals, many from the nationís progressive social
time, there was little funding for not-for-profits in Australia,
so Pegasus was founded as a for-profit company with an AUS$100,000
ethical investment. Pegasus founder Ian Peter hoped that
ethical investors would be less demanding of a return than
their mainstream counterparts. This would provide the organization
with a greater degree of independence in fulfilling its
on, Pegasus struggled in an atmosphere of apprehension around
the introduction of non-academic ISPs. As a result, the
market for Pegasus services was quite small and space for
technological advancement limited. Pegasus attracted many
users who saw the potential of electronic communication.
Unfortunately, complicated dial-up software discouraged
many people and resulted in high user turnover. By early
1991, Pegasus obtained a connection to ARNOT, allowing users
more regular and less costly Internet access. By late 1991,
the situation was improved further when users were granted
Emergence of the World Wide Web:
Pegasus became the first publicly accessible WWW server
in Australia. Improved dial-up and PPP followed shortly.
By the end of 1993, the WWW and online networking were gaining
popularity. Technologically superior commercial ISPs and
third sector Internet specialists began challenging Pegasus
for its share of the market. Pegasus was shackled with text-based
APC software and cash-strapped, long-time activist users
who resisted change.
effort to satisfy the greatest number of users, the organization
opted to offer old and new services simultaneously, forcing
itself into a situation that required cross-subsidization
of services. As a result, there were very few resources
available to develop or promote new services, such as web
hosting. Ultimately, Pegasus entered a period of severe
in 1993, Pegasus began to feel pressure from private competitors
in the ISP business. It needed to set itself apart from
the larger, richer, more modern competitors by emphasising
the value of community networking and the practical, day-to-day
uses of the low-tech tools.
1995, Pegasus had several opportunities to profile its email
and conferencing strengths. The International Education
and Research Network (I*EARN) project featured online community
building among teachers and students across the globe. LandCareNet
Ė a project executed in cooperation with several environmental
ministries Ė facilitated communication among remote, rural
organizations. Both of these projects achieved relative
success, but not without substantial investment in basic
training, which further drained Pegasusí resources.
Sale to Microplex:
organizationís final effort to sustain itself was an innovative
project supported by sponsorship advertising from the Australian
Computer Society. It involved providing free Internet services.
The income generated financed the switch from Intel to Sun-based
equipment and expansion of the number of national POPs.
Unfortunately, this deal was not enough to keep Pegasus
ahead of the competition pack.
to break even it was imperative that it either buy another
ISP, or be bought out itself. It had also become clear that
Pegasus lacked leadership and direction. The organization
wasnít sufficiently entrepreneurial to advance its goals
or to achieve financial success and it lacked the resources
needed to pay a skilled business manager.
result, arrangements were made for Microplex, a large Australian
ISP, to take over Pegasus operations. Microplex would retain
Pegasus staff and continue to offer Pegasus services. The
development of a not-for-profit arm to serve Pegasus clients
was also discussed. In the end, however, the Microplex-Pegasus
deal was very commercial and verbal guarantees about non-profit
services did not pan out.
Future of the APC in Australia:
are indications that the critical mass necessary to support
a mission-driven networking organization now exists in Australia.
More funding is available for not-for-profit Internet businesses
as a result of the marketís growth. There are also more
organizations working with progressive sectors to meet online
of these is Community Communication Online (c2o), an Internet
consulting company founded in 1997 by former Pegasus staff.
It is the new Australian member of APC. c2o has been built
slowly, taking care to develop services that will effectively
meet the needs of APC clients and avoid the mistakes of
its predecessor. c2o now serves community-based organizations
throughout the Australasian region and has expanded its
original consulting mandate to include training and web