CAMPAIGNS: Weekly Web Watch - Gauging the true cost of free access

Organisations: internet service providers
Issue: free internet access
At: www.freeserve.net; www. ntl.co.uk; www.altavista. co.uk; www.bt.com

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

adaptor.



Following this spate of announcements, the Government pressured BT into

acting. BT did so, slashing the cost of its proposed SurfTime

services.



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

brochure.



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

anti-competitive.



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

heightening competition.



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.



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