AltaVista cancels unmetered service

It started the unmetered ball rolling, now it's stopped it dead

AltaVista becomes the latest Internet firm to back down on its promises to consumers as it ditches its unmetered access service "indefinitely" and blames BT for the failure to deliver.

Less than six months after it announced flat rate Internet access for life to a fanfare of publicity the Internet search engine giant disappoints thousands of users that had registered for the service. It claims the unmetered model is financially unsustainable while BT maintains its stranglehold on local telephone lines.

"The current state of the UK telecom market has not enabled the company to deliver an unmetered service," reads a statement. Questioned as to why the firm has performed such a dramatic U-turn, a spokeswoman points the finger at BT.

"We had every intention of going ahead and Friaco [BT's wholesale product which would allow providers to offer unmetered services] was supposed to be going live in July, now it is delayed to September and new research suggests it may not happen until January," she says. "Rather than roll out a service that couldn't cope with demand, we decided to suspend it indefinitely."

AltaVista's service was due to roll out at the end of June and the Internet firm promised that half the UK would be surfing within a year. The anticipated one-off fee of £10 was changed to a sign-up fee of £59 with an annual renewal charge of £50.

Although around 250,000 are believed to have signed up for the service, AltaVista claims that "no-one had paid any money". It is the latest in a long line of unmetered access fiascos. Other ISPs, like CallNet and LineOne, have ditched their unmetered services. Complaints have been flooding into Trading Standards offices, telecoms watchdog Oftel and the Consumers' Association. The Consumers' Association has warned users that they have little legal comeback, but describes the unmetered fiasco as "immoral".

Experts predicted months ago that unmetered services would not work, due largely to the fact that BT still charges service providers per minute to rent telephone lines. With the promise of unmetered wholesale product Friaco round the corner many ISPs went ahead with services, believing they could subsidise them in the short term. With no immediate sight of Friaco, many ISPs are now struggling to cope with the demand for unmetered.

Who is to blame? Where is Friaco? Industry reaction to follow

The best you can say for AltaVista is that they may honestly have thought they could provide a profitable unmetered offering. "The numbers involved are complicated, and it may be that they were simply unable to add them up," said one rival yesterday. Most of their rivals believe that if they did, they were incompetent and Guy Kewney tends to agree. Go to AnchorDesk UK for the news comment.

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Read our roundup, Unmetered access: How it all went wrong...

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