Jane Wakefield: The day the Internet went free
Welcome to the Wild West of the Internet, where rules are made to be broken and mavericks can ride into town and start a revolution. Which is exactly what US firm AltaVista did on Monday (reported exclusively on ZDNet on Friday). Waving an Internet pistol filled with free bullets, it woke the sleepy ISPs out of their pay-per-minute reverie to fire the biggest blast at access since Freeserve took away subscription fees.
The ink barely had time to dry on the AltaVista deal when along came cable company, ntl, with a better one. And then Virgin, and then Excite (although I have to say their announcements are about as solid as jelly and seem to owe more to PR than to product).
The whole kerfuffle reminds me of a game we used to play in the playground, where one person would jump on another person's back, then another, then another until the pile collapsed in a heap......
In the house of cards that has become the Internet economy, this latest market madness looks the shakiest of all. From a situation where the big Internet players claimed it was not economically sound to offer free services, they now seem to be clamouring to prove themselves as capable as ntl and AltaVista in offering such deals. One-upmanship is the name of the latest Internet game, and it's rapidly descending into farce.
The Yanks came in, guns blazing, offering UK users what they really, really want. Then Virgin waved its hands about, shouting ME TOO, ME TOO! Then Excite. It will only be a matter of hours (or possibly minutes) before Freeserve, AOL, LineOne and the Bridlington Women's Institute announce that they, too, are happy to bankroll the British obsession with surfing. So the big question becomes: Are the ISPs beaten into second place by US companies waving, or drowning?
Remember the Freeserve bandwagon, where a new free access ISP was created every day? This will be even more hysterical as established players now have more to lose. "If the Freeserve model is about to bite the dust and the free ISPs don't respond, their businesses will grind to a halt," warned Gartner Group analyst Adam Daum. There is no loyalty in Internet land, and eyeballs are happy to wander. Without eyeballs, the precarious business models of the ISPs hang on the precipice.
It's all rather depressing that it has been left to the Yanks to make UK surfers dreams come true. But then we mustn't forget that ISPs are tied to BT (quote: BT), sharing revenue for every Internet call with the telco. And let us not forget that while experts claim the latest announcements will damage BT, it is still getting money for every one of the new offers out there. AltaVista will pay it per-minute for the calls its customers make. Ntl will pay per-minute for every BT customer it gets on its service. And so on and so on until the coffers of BT are swollen with Internet money. Isn't it the final irony that the company accused of holding back the Internet revolution will profit from every new user the AltaVista's of this world bring online.
BT has given no response to the latest developments. From its position on top of the heap, it barely needs to.