Unmetered access receives a much-needed boost Wednesday as AOL rolls its flat-rate service out nationwide.
The service is expected to boost AOL's subscriber figures massively.
Unmetered access provides users with unlimited Internet time for a fixed monthly fee but have been a disaster in the UK as ISPs were forced to cancel or limit services. AOL says it can sustain its current business model and audaciously declares it now offers the best unmetered service in Britain.
The £14.99 per month service is based on BT's Friaco unmetered system ... "That puts it in a different league", according to an AOL spokesman. "It means it is a true flat-rate service that is viable financially for us and is technically a more robust way of offering flat-rate."
Friaco (Flat Rate Internet Access Call Origination) is generally regarded in the industry as a victory for ISPs over BT. The telco believed it had satisfied industry calls for unmetered access with SurfTime, which allowed ISPs to offer flat-rate services. ISPs responded with vociferous complaints that the SurfTime deal was unworkable and Oftel finally forced BT to roll out Friaco in what was hailed as an historic shift in the telecoms landscape.
Friaco has two major advantages for ISPs. Unlike SurfTime it charges a fixed fee to ISPs, allowing providers to work out the costs of providing customers with unmetered access before announcing services. Previous unmetered models floundered because ISPs could not balance the books, charging customers a fixed fee but paying BT per minute for the rental of phone lines.
The second advantage is a technical one. Instead of running over the old PSTN (Public Switched Telephone Network) which was never designed to carry Internet calls, Friaco runs over an IP network.
According to the spokesman AOL users already up and running on the service are more than happy with its robustness. They are "euphoric" about the offering he says. "It has been amazing. The fastest take-up of any price plan we have had and AOL members say it works."
AOL is currently the only ISP in the UK offering a Friaco-based service and the spokesman puts this down to three factors. "Firstly we invented this and it is immensely complicated. It is difficult for other ISPs to get their heads round it," he says. Secondly he believes the fact that AOL is the only ISP that is telco-independent gave it an advantage. "We can go out into the market and buy flat-rate deals from lots and lots of providers," he says. Others like Freeserve he claims will have to wait for their preferred telco to bash out a Friaco deal with BT.
The third, and perhaps most important reason why AOL has got a head start is, according to the spokesman because AOL is a subscription-based ISP. "With Friaco, the bill comes to the ISP and so the ISP has got to have a billing relationship with the customer," he explains. While subscription-free ISPs will have to build a billing system from scratch, AOL just had to flick a switch. "We are already there but others will have to create billing systems and believe me they are a nightmare."
AOL acknowledges that other players will quickly follow. "We know that everyone is going down the Friaco road. It is the way forward," he says.
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For more information see the Unmetered Access Guide