Would you pay £6 for privacy?

Zero-Knowledge launches Freedom.net, which aims to give Web users anonymous access to email, Web sites and more. But Freedom.net isn't free, and there's the rub

Information just wants to be free, but Zero-Knowledge Systems USA is betting that online users will pay a little to keep their own information private.

On Monday, the Montreal startup launched Freedom.net, which covers the tracks of Internet browsers, making their online moves anonymous. While accounts cost $10 (£6), users must pay for five accounts up-front. The accounts can be spread over a five-year period or used in one year. In exchange for their $50, users get access to a pseudonym that, in most cases, hides their real identity.

Freedom.net arrives as surging Internet usage makes online privacy an increasingly sensitive issue.

America Online , Yahoo! and others have handed out user data under subpoenas, and a number of companies have tracked users' musical tastes, email correspondence and other private information.

Such issues have sparked political problems. Just this week, the European Union said it remains unsatisfied with US initiatives to protect privacy. As a result, the EU will not allow companies that operate within its borders to transfer personal data back to the United States.

"The issue of privacy will be to the next century what civil rights was to this century," predicted Austin Hill, president of Zero-Knowledge "The ability to hide a part of your life is going to be a key facet of browsing the Internet."

Pro-privacy advocates have been up in arms about the abuses. "We have been saying for a long time that anonymity is critical to online privacy," said Marc Rotenberg, director of the Electronic Privacy Information Centre in Washington. "Anything that helps privacy is good."

Zero-Knowledge created its system explicitly to prevent such disclosures. "When we are asked for user information, we can truthfully say we have zero knowledge," Hill is fond of saying.

While other anonymous services exist, they typically offer only anonymous email. Freedom.net goes beyond that. By routing data through the network of servers, Zero-Knowledge allows users to browse the Web, email and chat with others, and monitor what data the computer is sending out, all the while hiding behind one or more pseudonyms.

The downside to Freedom.net is slower Web performance since it actually reroutes data packets through its own network.

But Hill argues that the performance hit for users is minimal. "There is not a big, noticeable hit," he said. "Of course, it varies with the number of servers you route through," he said. Customers can use between one and three servers to make the data they send anonymous. The more servers used, the harder it is for an outside agency to track the data, but the slower the performance.

Creating such a network was not easy. The project was supposed to be completed last December, but delays and new features pushed back the release.

Zero-Knowledge intends to slowly ramp up its network, allowing no more than 10,000 new users per week. Of course, that limit may not be reached, but the beta program drew 15,000 users, and another 70,000 signed up on the list of interested participants.

While Freedom.net does give consumers as much privacy as they have in the real world, more is needed, say the advocates.

For one, the company has yet to find a solution to deliver anonymous e-commerce transactions -- a critical piece to a private Internet. To buy online, consumers use a credit card, which instantly identifies them. On the other hand, that situation is the same in the offline world.

To combat such problems, better regulations are needed, said EPIC's Rotenberg. "A lot of companies will exploit the user information," he said. "That's why good regulations are needed in addition to the technology component."

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