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Free-Internet Access

Jul 06, 1999 10:44 AM
by M K Ramadoss

Here is a news item. The free-internet fever is catching on, at least in
the Europe. What next? Giving away a computer too to surf?

The social impact of the current trend is going to be very far reaching and
is going to shake some of the membership/spiritual organizations.

It would be interesting to see where all this will help dissemination of
theosophy and how it is going to affect the theosophical organization and
its leadership have believed and operated in the hierarchical communication

It looks like the Powers Be seem to think otherwise as seen by the sudden
emergence of Internet and its impact on communication in the society.

Keep tuned. Next millenium is going to be very exciting.


Europe's ISPs: How free?
Free Web access in Europe is
booming, but call charges weigh heavily

"The dramatic rise of "free"
Internet services across Europe over the last six
months is now raising a critical question: How long
will it take before free access becomes completely
Following the lead of Britain's Freeserve, a host of
telephone companies, retailers and banks have
launched no-subscription-fee online services of their
own -- in Spain, France and Germany as well as in
the United Kingdom.
But as their numbers increase and newcomers vie
to attract and keep users, some are sure to eliminate
the cost of "free" access - the local phone charges
users pay for the time they dial into the Internet.
"We believe by the end of this year you will see a
completely free-to-air provider in the UK," said Nick
Jones, an analyst at Jupiter Communications Inc., an
Internet market researcher.

Users want free Web access

"There will be some ambitious retailer or network
operator that packages some services so that
access is free," he said.
But getting that first provider to go "free-to-air"
may take more time than people expect. The free
providers first have to build up enough additional
revenue from advertising and electronic commerce to
cover the phone charges.

Service providers resist

There is also a great deal of resistance from
some of the major Internet service providers (ISPs).
AOL Europe, a venture of America Online (AOL) and
German media giant Bertelsmann, plans to start a
free service of its own, but sees it more as a fad than
a lasting business model.
Deutsche Telekom (FDTE), whose T-Online unit
is the largest access provider in Europe, is opposed
to the free-to-air concept.
All the free providers offer cut-rate Internet access
in hopes of ringing up other streams of revenue.
Freeserve is trying to become a major portal -- a
high-traffic Web page that makes money from online
advertisements and takes a cut of any e-commerce it
brings to e-retailers connected to its site.
Telefonica, the Spanish phone company, wants
its Teleline service to boost traffic for its phone
network. Dell Computer (DELL), which has launched
free services in Britain and Germany and plans to go
to France and other countries, believes DellNet will
drive sales of its PCs.
But with so many providers trying to build up a
loyal customer base, some free providers will
eventually resort to picking up their customers' phone
tabs as part of the deal, said Ian McDonald, an
analyst at Charterhouse Securities Ltd.
"It's not inconceivable to imagine some Internet
service providers even paying customers to use their
service," said McDonald, who follows Freeserve's
parent Dixons Group (DXNS), an electronics retailer.

No charge to look around a store

Dixons, he added, is more interested in getting
revenue from selling products online than getting
the cost of running a store -- you don't charge people
to come in and look around," McDonald said.
The rise of free services has been hailed by
Internet watchers across Europe because they are
helping get more people online.
Within months of its September 1998 launch,
Freeserve had one million users registered to use its
service. Scores of others - including retail rival Tesco
(TSCO), Barclays Bank (BARC), and broadcaster
BSkyB (BSY) - have joined the fray.
The switch to really free Internet access could put
Europe on the way toward narrowing the gap with the
United States in the online boom.
Many Americans spend 50 hours or more a
month surfing and shopping online because they get
unlimited local phone access for a flat, monthly fee.

High charges discourage use

Europe's system of per-minute charges
discourages heavy use. In Germany, 30 hours of
online time can cost 150 marks ($78.50) or more.
And every additional minute ups the cost. "If you take
away the meter, usage goes way up," Jones said.
At least one British provider, X-Stream
Technologies Inc., already offers unlimited, totally
free surfing - but only on selected weekends. E-mail
messages alert X-Stream users a few days before it
activates a toll-free 0800 number.
X-Stream likes the idea of going totally free, but
has no plans to do so without competitors pushing it.
"We are already the freest service. Why should we
make it even freer?" said marketing director Paul
None of the free services can yet afford to go
all-free all the time, and even the biggest have to
work to get there.

Freeserve is U.K.'s biggest

Freeserve has already passed AOL Europe as the
largest provider in Britain. But because of its
amorphous customer base, it may have a hard time
generating the advertising revenue to support a
free-to-air offer.
Without a subscription fee tying customers to
Freeserve, some could sign up and quickly switch to
another provider, or never use Freeserve at all.
AOL Europe thinks advertisers will prefer hard
demographics that come from a subscription-based
service that knows the names, addresses and credit
card numbers of who is online.
The best chance for truly free Internet use may
come from phone companies or cable TV companies
that can offer access as a part of another service.

Germany's free service

Net users in Kiel, Germany, for example, can surf
all day and all night with no extra charges as long as
they switch their basic phone service from Deutsche
Telekom to a local phone company owned by
Mobilcom (FMOB).
Mobilcom wants to make the same offer in other
cities where it doesn't have local exchanges, but
must rent phone lines from Deutsche Telekom to do
so, and that is bogged down in months of
negotiations and technical work.
That leaves Deutsche Telekom and its T-Online
as the provider for most Germans. Furthermore, the
former monopoly has no interest in dropping
T-Online's pay-as-you-surf system for a flat rate or a
free model.
"The user must always pay," said Chief Financial
Officer Joachim Kroeske. "Access is a service that
has a value and you must pay for that."

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