Hit the net, not your pocket

Internet subscriptions may be free, but it isn't cheap to visit a website
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The Independent Online

You can buy just about anything online, from mortgages to investments and insurance. Organising finances on- line can be cheaper; it is certainly quicker and more convenient. Websites are open 24 hours a day, and there is no pressure from an adviser or salesman to rush into a decision.

You can buy just about anything online, from mortgages to investments and insurance. Organising finances on- line can be cheaper; it is certainly quicker and more convenient. Websites are open 24 hours a day, and there is no pressure from an adviser or salesman to rush into a decision.

Unfortunately, using the internet itself is not free. Costs have come down in the last year thanks largely to the launch of Freeserve, the free internet service provider (ISP), whose lead has been followed by dozens of other organisations. Among these are banks and building societies such as Barclays, Lloyds-TSB and Nationwide; supermarkets and stores such as Tesco and Waterstones; and brands as diverse as Manchester United and Virgin.

But the term "free" is something of a misnomer. More accurately, these services are subscription-free. Before Free-serve, the typical net user paid around £10 a month, plus VAT, to subscribe to an ISP. Freeserve and its rivals have done away with the monthly charge but net users still have to pay for calls every time they go online.

These costs can be substantial. Almost all ISPs charge a local call rate for access. BT's standard rate for a daytime local call is 5p per minute. This means that an internet user who spends an hour a day online, at peak rate, will clock up £12 a week or £624 a year on connecting. Spending two hours online every weekend, when BT's rates fall to 1p a minute, means a bill of £62.40.

The free ISPs take part of the money from the call charges and use it to cover the cost of running their services. This, along with the revenue they make from premium-rate technical helplines, allows them to do away with monthly subscription fees.

"Call charges in general are going to fall," says Lesley Smith, director of corporate affairs for Freeserve's parent company, Dixons. "The question is not whether charges will fall, but whether we will move to the US flat-rate model." Other costs associated with the net are falling too. Ms Smith points to the fact that shoppers can buy a net-ready PC for £500 as evidence that the net is no longer the preserve of the rich.

Home internet users who spend relatively little time on- line, or who make most use of the internet in the evenings and at weekends, will usually be best off with a free ISP. Heavier users, and those who are online at peak times, should look at the new deals being offered by internet companies that prom-ise to cut calling charges.

AOL recently announced a new package aimed at frequent internet users, where the maximum charge is 1p a minute whatever the time of day. AOL charges £9.99 a month subscription, but if a net user spends five hours a week online during the day, the saving on call charges is £9 a week or almost £500 a year. Subscribers will also have access to AOL's content and specialist features such as parental controls.

AOL has called for the phone companies, especially BT, to move towards the American model of free local calls. In the US, AOL users spend around an hour a day online. Here, the figure is 17 minutes.

The disadvantages of free local calls are that internet services have to charge subscriptions, and that people connec- ting their PCs permanently to the net puts enormous pressure on the phone system.

AOL's service has some drawbacks. The most serious is that the service does not support fast ISDN or BT Highway lines, so users have to rely on slower modems. Subscribers also need a credit card: the monthly subscription and call charges are billed to the card.

Few other companies have gone as far as AOL in cutting charges. Instead, they restrict their free or discounted rates to the evenings and weekends. For net users who don't want to go online during the working day, these can be better deals.

BT Internet provides a free phone number for access at the weekends. Users pay £11.95 a month for subscriptions. Calls during the day and the evenings are at BT's standard rates.

Freeserve offers its users a deal with the telephone company Energis. Spending more than £10 a month on international or national-rate calls with Energis earns £10 a month of free off-peak calls to the net.

Several ISPs offer inclusive call plans rather than free access at certain times. Cable & Wireless Internet and ClaraNet are two companies which let users buy blocks of calls in advance.

Cable & Wireless Internet offers a range of deals with either 21, 35 or 75 hours of off-peak access; subscriptions start at £5.99. For users who also take Cable & Wireless's phone services, the company operates discounted calls to the internet outside the free calls. Savings for internet users going online during the working day should be around 25 per cent.

ClaraNet's packages offer free net connections during evenings and weekends. The cheapest, at £5.99 a month, gives 12 hours a month of free net calls.

* Contacts: Freeserve, www.freeserve.co.uk; ClaraNet, www.clara.net; BT Internet, www.btinternet.com; Cable & Wireless Internet, www.cwcom.net; AOL, www.aol.co.uk

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