The big LineOne let-down

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The Independent Online

LineOne set itself up to be the latest target of public mauling last week when it axed its unmetered internet service without so much as a word with members. It was bound to happen sooner or later, but the way in which it did showed little concern for the punters who had stuck with LineOne through its difficult times.

LineOne set itself up to be the latest target of public mauling last week when it axed its unmetered internet service without so much as a word with members. It was bound to happen sooner or later, but the way in which it did showed little concern for the punters who had stuck with LineOne through its difficult times.

Twenty-four hours after disabling the unmetered service, LineOne sent round a message saying that it had underestimated demand and was ditching it so that it wouldn't "inhibit future investment in the LineOne product". Presumably, that means LineOne shareholders - United News & Media, and BT - have sealed their bottomless pit and are refusing to give any more cash to support a bandwagon activity.

It has to be said that the closing down of LineOne's unmetered free ISP offer was no skin off United News & Media's nose, which has bigger fish to fry with the Carlton merger, and watching its back for Granada's next move.

Financially, it seems LineOne is now residing in the nether regions of the cesspit, having lost the support of its shareholders to keep pumping money into a loss leader.

A move as decisive as this cannot be made without further questions arising about the viability of the unmetered free-access model. LineOne expects the competition to follow its lead, after admitting that its operating costs for unmetered were actually three times higher than it had originally forecast, while, of course, declining to give any figures.

So where does this leave LineOne? While the message sent out to members said LineOne would keep the service running until September, most members found their accounts inoperable the day before the message was issued.

Whatever the case, the "too good to be true" £5-a-month switching deal with Quip is dead, and in its place, punters are being force-fed the ubiquitous BT Surftime, although don't expect many of them to stick around until September. Most of them feel hacked off at having been seduced by a decent offer only to have it taken away within a few months.

Was that the plan all along I wonder? What's clear is that the flat-fee unmetered model is proving unworkable in the current climate, with BT still dictating the whole internet connection game.

The broadband wagon rolls on

The big discussion topic of the moment is broadband and how, when it arrives, it will make up for all the pain and suffering caused by narrowband. However bad the broadband situation in the UK looks right now, rest assured that in 12 months' time we'll have more broadband options than you can shake a narrowband stick at.

Last week I went along to a Wired Sussex event in Silicon Beach, Brighton, and was pleasantly surprised by the enthusiasm of both developers and the providers alike. Telewest, now slicker than Des O'Connor, appeared to have its head screwed on the tightest, although it still has a long way to go to fix the problems plaguing its Surf Unlimited product.

Still, Telewest has a lot to smile about. Its biggest competitor, the now-humbled NTL/Cable & Wireless, is fumbling in every department - even its shining star, digital cable, is shooting blanks (I know, I'm a disenchanted subscriber). For a company that was written off as an acquisition target just 12 months ago, Telewest is now looking the better proposition of the cablecos.

The other thing adding the polish to Telewest's boots is the closer ties it now has with pan-European cable giant UPC, which gives it more strategic clout in Europe and a second option (Chello) for broadband in the UK, beyond blueyonder.com.

And that option just got so much better last week with the $6bn merger of Chello with Excite@Home's international operations, creating Excite Chello, a company already operating in 15 countries.

What this means for the UK is not initially apparent. Chello clearly wants to move into the UK but has repeatedly denied claims that it would use Telewest's cable infrastructure. It will push for piggybacking a few of BT's local loops when they're opened up next year, but in the meantime it should be pushing BSkyB to do a joint satellite broadband service. One problem could be Excite UK's parentage (yes, BT has a big finger in this pie, too) which could throw a spanner in the works for extending Excite Chello to the UK, or at least give Excite UK quite a few headaches trying.

Big audio dynamite

IT HAS finally happened, albeit parsimoniously. EMI broke the gentleman's agreement among major record labels last week when it became the first to sell music downloads of its artists over the internet.

Whatever success or failure EMI has with this venture will not detract from the fact that it will go down in history as a landmark development, mainly because it's the one thing that record labels have been unequivocally fighting for the past five years.

But now they're all at it. It's remarkable, or at least it would be if it wasn't another typical case of the "do or die mentality", where a single toe in the water is used as justification for saying: "we're evolving and we're modern".

If it takes off, it could spell the untimely end of MP3 as a digital audio format and open the door for Microsoft to steamroll in with its Windows Media Player, and corner yet another market. With Liquid Audio in tow, Microsoft could soon expel the MP3 format to the betamax bin. And MP3 is going to become a format for underground music trading, unless something pretty radical happens.

amy@wagswell.co.uk

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