Freebox to open phone lines Monday

A new company is giving away set-top boxes, with the aim of providing Internet access for all. But will Freebox succeed where other "free" deals have failed?

From Monday, it will be possible to phone up and order an application form for a free set-top box that will provide access to digital television and the Internet.

Few company details are available on the Web site, but ZDNet understands that Freebox is funded by British backers who are keen to move production to the UK. Units are currently being manufactured in America and factories will open in China and the Czech Republic soon.

The company, is aiming to smash the UK's digital divide by giving away the set-top box. By freely distributing a device that will receive digital TV and let users surf the Web from their TV it plans to penetrate those British households without Internet access.

To get hold of a Freebox, customers have to complete an application form that must be sent to Freebox along with a refundable deposit of £10. The form can already be downloaded from www.iwantabox.com and from 9 October it can also be requested by phone, on 01753 441 271.

However, don't get your hopes too high yet, as it's likely that only 20,000 Freeboxes will be released in the UK before Christmas. Freebox hopes to boost production to 125,000 units per month from January 2001.

"We're anticipating heavy demand, and we certainly don't want to let people down", a Freebox spokesman explained. "With increased production, we're confident of releasing a couple of million units in 2001." According to a company press release, the Freebox Web site has received almost 500,000 hits since its launch late September.

Initially, a Freebox unit will only receive those digital TV channels that are free to air, such as BBC Choice and ITV2. According to its Web site the company is currently negotiating for access to pay-per-view channels, which users must pay to access.

As yet unclear is just what the box will be able to do when it arrives. Freebox makes big claims for the unit, saying it will be able to access the Internet, play DVD movies and MP3s, send and receive email, and will support broadband Internet access when it becomes available. But Internet and email will require the user to connect to an ISP, and Freebox did not say whether it has plans to act as an ISP itself.

Freebox did not release the technical specifications of the box, but said it contains a 56k modem, the standard on home PCs. The unit also includes a wireless keyboard, remote control, Webcam and microphone for Internet-based telephone and teleconferencing. The latter two services will probably not be available without broadband access, however, according to Freebox.

The only feature about which Freebox will give details is a DVD-based shopping service, which it touts as "a whole new medium". The DVD will simulate a broadband experience by including shopping sites chock full of images, video and 3D content, but the Internet connection will only be used to make transactions.

Freebox will rely on vendors renting shopping and advertising space on the disc to pay for the free hardware. But at the same time, the company appears to be out of luck if users decide to bin their DVDs -- which will be sent out each month -- and just use the Internet surfing functions of the machine.

Users won't need to own a credit card to shop online either. Freebox plans to release charge cards which could be bought in local shops and then used to pay for goods online.

If Freebox is able to make its business model work, the potential market is massive. The Office of National Statistics found that 25 million UK adults had never accessed the Internet. Absence of a home computer and lack of confidence and skills were two of the most popular reasons given for never going online.

Freebox isn't the first to try and launch a business by giving away hardware. Back in 1999, computer vendors were falling over each other to offer "Free PCs". These deals provided the customer with a personal computer, but in reality there was always a charge, such as tying customers into telephone deals or Internet access contracts. The Free PC offers were soon withdrawn.

However, Freebox insists that their revenue will come from other companies, not the man in the street.

Will Freebox wire Britain to the Net? To have your say online click on the TalkBack button and go to the ZDNet News forum.

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