AltaVista offers unlimited surfing for £10 a year

Internet firm AltaVista brings affordable access to UK users. Jane Wakefield gives an exclusive report

UK consumers will be able to surf the Net for as long as they like for just £10 a year, ZDNet has learned. Internet firm AltaVista will announce its service on Monday, based on a new business model.

The service -- which is expected to be commercially available in the summer -- sees AltaVista as the first big Net player to take the plunge in the uncharted waters of free Internet calls with its nearly free service. CallNet 0800 set the ball rolling when it launched its totally free service back in November. Since then, ISPs like X-stream have trialled similar offerings, but most of the big ISPs appear to favour the traditional subscription model -- offering unmetered calls for a monthly fee -- amid worries that networks would not cope with demand.

Gartner Group analyst Adam Daum believes AltaVista's offering -- as yet unnamed -- will sound the death knell for BT's unmetered offering, Surftime. "If AltaVista can manage to pull this off and make a business out of it, Surftime is dead in the water," he says. "I have been saying for years that this is what consumers want."

It is believed AltaVista will team up with telco MCI WorldCom to deliver the service. Daum thinks ISPs will watch with interest to see how the network copes with demand. "It is something other players have been worried about. If WorldCom can't do it, nobody can," he says.

CallNet 0800 welcomes the new service, claiming that it endorses its own business model. "The UK undoubtedly wants totally free access. AltaVista is a world-class organisation, and we are pleased to have them by our side," said a CallNet spokesman.

Details of the service are thin, but it is thought users will be charged a one-off £35 connection fee, with a yearly £10 fee. AltaVista launched a similar offering in the US last summer. In return for free access, users had to watch a constant stream of ads and have a personalised AltaVista page as their permanent homepage.

In order to offer free calls, AltaVista will have to subsidise the service, which is another worry for mainstream ISPs. Line One's managing director, Ajay Chowdhury, claims it would cost his company up to £50m a year to offer a similar deal.

While CUT (Campaign for Unmetered Telecommunications) welcomes AltaVista's announcement, it is worried that deals like this obscure the real issue of pay-per-minute access. "Deals like this don't deal with the root of the problem, which is the high price of buying flat-rate from BT," he says. "New media companies subsidising telephone companies is not the long-term solution."

You've read the news of the AltaVista revelations now read the comment from AnchorDesk UK with Tony Westbrook.

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