Network: Free-for-all breaks out on the Net

Dixons' launch of a free Internet service will force other UK ISPs to brush up their acts

The Internet is becoming a free-for-all in the UK. While there may be as many definitions of `free' in the lexicon of Net marketeers as there are for sex in the mind of Bill Clinton, Dixons Group appears to have one that is close to the dictionary's. Its new Freeserve Internet service, launched last week, seems to be free of all charges except the price of a local telephone call, but there are inevitable exceptions.

"We are providing a full, usable Internet connection and service for individuals and small businesses and increasing the value of the Internet to those users with content," said Mark Danby, general manager of Freeserve Limited, part of Dixons Group. "All our subscribers have to pay for is the price of a 0845 telephone call - the Internet service is free. The average monthly cost of an Internet account is somewhere near pounds 12 plus the call. Freeserve represents a significant savings opportunity for British Internet users."

Historically, Internet Service Providers (ISPs) charged a set-up fee which could be as much as pounds 50, and a monthly flat usage fee ranging from about pounds 9 to nearly pounds 20.

Online service providers such as AOL and CompuServe bill by the minute with a lower monthly charge and no set up fee. They position their Internet service as incidental to the online content they provide.

Dixons' Freeserve offer includes a CD-Rom of software needed to sign on and access the service, an unlimited number of standard Internet e- mail addresses, free web space and unlimited connection time. Freeserve CDs will be available in 900 Dixons, Currys, PC World and The Link stores. The software only runs on Windows 95/98 and NT. Apple Macs and older PCs need not apply.

Telephone support, however, isn't free. While support files on the CD- Rom and web are available free, PC Mastercare will supply Freeserve's personal telephone support at a cost to callers of pounds 1 per minute, something that is normally included in the monthly billing by most ISPs. Dixons expects that most experienced users will be able to connect to their service without technical support. Dixons estimates that chargeable support calls will last less than five minutes on average.

But will Dixons' move into the Internet market spell doom for other ISPs? Not necessarily. William Poel, managing director of UPS Networks, an ISP based in Essex, thinks the scheme is good news for the Internet in Britain. "Freeserve will force ISPs to look for new ways to add value for their customers instead of just providing the equivalent of an Internet dial tone. Freeserve will help the Net grow faster and that's good for everybody."

As a result of Freeserve, the price of Net access in Britain will inevitably fall, according to Laurence Blackall, the chairman of the Internet Service Providers Association and CEO of the Internet Technology Group, which runs Global Internet. "Users will need to define what they want from their ISP in terms of the quality of service and support. Some users will go for a `free' scheme and others will realise that there isn't any such thing as a free lunch," Blackall observed.

Freeserve's revenue is expected to come from a combination of advertising on the its site, and a rebate of a proportion of the money that the user pays for the 0845 call. These so-called telco kickbacks are said to be worth up to 20 per cent of the cost of the call.

One other "free" Internet service mails advertisements to its members to earn part of its crust. One wonders if Dixons will be able to resist using its subscribers' e-mail for promotions. One thing is certain, there are no free lunches here.