Campaign for Unmetered Telecommunications

Rumours of its death are greatly exaggerated (1 September 2000)

Recently several Internet Service Providers (including Callnet0800, LineOne and AltaVista) have withdrawn existing unmetered Internet dialup services or not released them at all.

Many have asked us, or speculated aloud, 'is this the death of unmetered Internet access?' and our answer is that 'rumours of its death are greatly exaggerated'.

What's happening?

The withdrawals and failures were due to the fact - which we have stated ad nauseam - that the business models that those ISPs were using, which were based solely on use of the public switched telephone network (PSTN) to carry Internet calls, were unviable.

Even though those ISPs were offering unmetered access to the consumer, they were facing metered charges somewhere along the call transmission. Given that these charges had to be absorbed to support a monthly or yearly subscription fee, and that that fee was often very low, it proved impossible to run the resulting service at a profit or break even.

Also, how long people would spend online was often grossly misjudged; some ISPs believed surveys, assumed that unmetered usage would be three or four times metered usage, and priced services accordingly. From our personal experience and observations, had we been asked, we would have suggested at least a factor of 10 or 12 difference to be on the safe side. If this meant services not being released, so be it.

FRIACO - in the state it has currently reached - and BT Surftime remove these metered charges to a greater or lesser extent; however, ISPs have been reluctant to sign up to either for reasons which we are yet exploring.

So is BT to blame?

In part. Kicking BT has become a national pastime: indeed, delays to a completely acceptable version of FRIACO - caused by the negotiations between BT and participating bandwidth operators becoming immensely contentious and drawn out - have not helped. Our opinion is that some ISPs launched PSTN-based services so as to be first to do so, in full knowledge that they were not sustainable indefinitely, yet expected that FRIACO would come along 'soon' and bail them out.

But launching unviable products on the expectation that something not certain to take place would make them viable, and also grossly underestimating demand for those products, was hopelessly naïve. Certainly it is commercially to your advantage to be first - as long as your service is credible.

The future of unmetered access

Outside cable companies, whose customers are already covered by NTLworld and SurfUnlimited, we believe that the long term trend is towards basing unmetered services on BT SurfTime and FRIACO.

That trend is already becoming explicit. For example:

  • delaying the launch of an unmetered service until FRIACO is finalised;

  • rather boldly stating that, in Autumn 2000, it will launch a FRIACO-based unmetered service for £15pcm;

  • LineOne withdrawing their PSTN unmetered service and replacing it with one based on BT Surftime.
In addition, the launch in late August of BT Openworld's ADSL service for the home user, which will be available from both BT Openworld and Freeserve almost immediately and others soon, plus improvements to Blueyonder and NTL cable modems, should encourage many of the heaviest telephone modem users to migrate to broadband.

This will give them a technically far superior service to the telephone modem, albeit at a cost, and take pressure off the PSTN.

That people who want to use the Internet for a greater part of 24 hours a day, 7 days a week, for whatever reason, are being obliged to use dialup connections is ridiculous; clearly the industry has failed them by not offering services which are both in demand and technically possible. Calling them 'abusers' is unhelpful.

What good will come out of all this?

We note that bodies previously silent in our time, such as the Consumers' Association and ISPA, have spoken out strongly on current events.

We hope that this has shocked the Internet Service Provision industry into being more conservative and humble in its approach before either it is discredited or someone, probably with little knowledge of the issues, decides to wield a big stick from outside.

Certainly some of the basic mistakes made by ISPs, such as underestimating usage, could have been avoided had potential users only been consulted in advance.

Finally, we hope that becoming aware of the tremendous pent-up demand for Internet use - the hard way - will concentrate minds.

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