Organisations: internet service providers
Issue: free internet access
At: www.freeserve.net; www. ntl.co.uk; www.altavista. co.uk; www.bt.com
With the cost to the consumer of using the internet being significantly
higher in the UK than in the US, there is growing pressure on internet
service providers (ISPs) to be more competitive.
Freeserve was the first company in the UK to launch an internet service
that charged no monthly subscription fee. It quickly became the
country’s leading ISP, boasting a 35 per cent market in January of this
year. On 12 March it also announced a new package where users are not
charged for calls. But Freeserve is far from being the only provider
trying to woo consumers with temptingly, cheap offers.
On 6 March, US portal Alta Vista announced that it is to launch an
unlimited, unmetered access service in the UK later this year. It will
offer customers a flat-fee service where, for an initial sum of around
pounds 50 and a small annual renewal charge, it will allow the user
unlimited, free access to the web.
Other companies have responded by stating their own plans to launch
similar services. That same week US cable company NTL said it would
provide free and unlimited internet access to anyone who subscribed to
its phone service.
Its telephone service costs a minimum of pounds 9.25 a month and can run
up at least pounds 10 a month in ordinary voice calls. The offer is only
open to people who can access the cable network, or to existing BT
customers, who will have to pay a further pounds 10 for a special
Following this spate of announcements, the Government pressured BT into
acting. BT did so, slashing the cost of its proposed SurfTime
The cuts, however, are not competitive enough.
BT’s problems lie in the sometimes draconian regulations imposed on it
by regulator Oftel. BT cannot ’bundle’ telephone products with ISP
products, to the extent that they cannot even mention both in the same
Prior to the deluge of companies proposing unmetered access, BT came up
with the idea of driving internet traffic by offering free internet
access, but when it applied to Oftel the regulator said this was
In addition, when a company invests in a free internet service it must
provide an initial financial outlay in anticipation of profit-making in
a few years time. Oftel feels that BT’s targets are unrealistic.
The web sites of the various ISPs give information about their internet
services but there is little in the way of explanation of this
With so many companies offering different services at different tariffs,
the overriding reaction to the new tranche of cheaper services is likely
to be one of bewilderment, rather than glee.