Still online in the land of the free

Lister Park, managing director of The Free Internet, tells Sandra Vogel how his ISP is dodging the dot bombs

Lister Park ought to be nervous. Managing director of a free internet service provider is not exactly the most desirable technology job to have in the current climate.

Lister Park ought to be nervous. Managing director of a free internet service provider is not exactly the most desirable technology job to have in the current climate.

Free ISPs have come and gone and some, such as the service AltaVista promised last year, never became a reality. But Park is a remarkably relaxed man. He talks enthusiastically about his job, is ready to work within the tech sector's subdued climate and is willing to see his company, The Free Internet (www.thefreeinternet.net), grow organically rather than try to take on the big guns.

This attitude undoubtedly has something to do with Park's own background. He came to the Business Online Group, The Free Internet's parent company, in May 1999 after a successful career in advertising, which included working for big-name companies like Dorland ­ sister agency to Saatchi and Saatchi, and being a founding director of Zenith, the Saatchi-owned media buying operation.

Despite his success, by his own admission, Park was ready for a new challenge. "The buzz had gone out of advertising for me, but the ISP sector was this exciting area where anything could happen."

Park soon got another buzz, though perhaps not quite of the kind he had expected. Business Online Group primarily operates as a hosting service for other ISPs, and soon after being made managing director Park was tasked with developing the service destined to be AltaVista's free ISP. It never launched. Frustratingly, Park says, AltaVista vacillated right up to the last minute. "We'd been in direct negotiations for the first three months of 2000, and even on the day the service went live they changed their minds several times about whether or not to be associated with it.

"In the end they pulled out completely. I don't think they quite realised at the start how much it would actually cost them to subsidise each user. But we had always intended to launch our own service a couple of months after we'd launched AltaVista's, and everything was in place. We decided to go ahead as planned."

They did indeed launch, and The Free Internet has just celebrated its first birthday ­ no mean feat in a sector where some free ISPs complete the whole business cycle, from cradle to grave, in less time.

The Free Internet operates out of surprisingly compact offices in Brentford, west London. Not only is all the administration done from here, the technical support, software development and hosting is all located here, too. There are plans to duplicate the hosting services at another site in the very near future, but presently taking a tour of the operation gives the feel of a cottage industry of the 21st century.

The membership of 200,000 active users is small fry compared with the likes of AOL, but it is enough to place the company firmly in the middle tier above a host of much smaller ISPs. Park seems relatively content with this after a year's existence. "We've not done any huge advertising, and not tried to grow beyond what we can manage," Park says. "We have to exist as a company, and we believe that to do that we need to grow bit by bit rather than biting off more than we can chew at any one time."

It goes without saying for any business that self-preservation has to be a primary concern, but on occasion this has meant making what some members see as tough decisions. Some of the key choices in this respect have related to the company's pricing structure. When The Free Internet started, its services were offered for a £50 initial fee, with £20 a year charged for annual renewals. Soon, the company realised this pricing regime wasn't sustainable, and the renewal fee rose to £50 a year.

Last September, the fee rose again to £89.99 and anyone signing up now pays an initial £99.99, and faces a renewal charge of £99.99 each year. Existing customers who signed on at the less expensive rates can renew for £89.99. Renewal notices at this higher price are just starting to go out. Park does not yet know what impact they will have on his customers, but he says the fee still represents good value for money when compared with similar services and is justified because it should offset the cost of users' telephone call charges.

"What does that word 'free' mean, anyway?" he asks. "In our case, technically, members pay for the dial-up software, so their day-to-day internet access is indeed free. But in the past, when membership rates have been lower, we have had to subsidise the cost of our members' phone calls and we needed to generate revenue to do this. The fee for the dialler helped, and we also carry advertising and special offers at our site."

Members are required to use the supplied dialler, and are sent to The Free Internet home page every time they log on, so they see its content as a matter of course.

The price rises have caused some bad publicity for the company. Similar bad press came when it cut some people off. Again Park is clear about the strategy. "We don't like excluding people from our service, but if they break our rules we are perfectly within our rights to do so. The Free Internet is not a service for businesses. This is made clear in our terms and conditions, which everyone sees before they sign on.

"If people use The Free Internet for commercial purposes, they are breaking the terms and conditions, and we are within our rights to throw them off. Similarly, people are required to dial in using our special software. If they circumvent this software, they are breaking their contract with us, and again we are within our rights to cut them off."

The next few months could be a watershed for The Free Internet. Their new pricing structure will start to kick in during May, so it is too early to try and second-guess its effect on membership renewals, though Park says there will be other renewal incentives for members.

There are also a number of new services planned, which may or may not take off depending on those two interrelated issues, the market's need and the marketing tactics.

Park's background may help him get the formula right. But if he thinks the Net world has changed a lot during The Free Internet's first year of existence, he should get ready to hang on to his hat during the next year because it seems certain to be another wild ride.