I'm thinking the cable guys will have to give the Internet access free of charge!!! I tend to think Levy is right in that if its free (who's gonna pay)...
I agree with Carolyn on this one. "It will be free. The package price will mask it." In other words, it won't be free (i.e. without cost or obligation), just "free". On cable, I'm sure there will be packages available that let one get "free" internet service if you also buy, say, local and long-distance phone service plus a premium video package from the cable outfit.
As an alternative, you might also be able to get "free" access if you accept the kinds of restrictions placed on usage by most of the "free" dialup outfits -- you must use proprietary tools for "internet" access that really gives access only to the web and email and not to other parts of the 'net, and you must agree to look at a barrage of ads while you're connected. (And remember, with a broadband connection, you're always on the internet so you'll be seeing the ads whenever your computer is booted up.)
However the "free" service plays out on both broadband and dial-up, I hope that GNET avoids the trap. (I also suspect that they will avoid it.) It's not an ISP, a business that is far from the core competencies in web media that they've built up so far.
It strikes me as surprising that the two very different businesses of network service and web media are conflated so often, but I suppose that's because the most prominent ISP-like business, AOL, is also deeply involved in web media.
Despite their media forays, subscriber fees are still a major part of AOL's income. But there's another side of that: Network costs are also a major part of their expenditure stream. WCOM doesn't give them all those thousands of modems and transport on their fiber for free. AOL must pay for it. Maintaining all their mail and chat servers is also not cheap.
The "free" ISPs still have all those network costs without any of the income derived from subscriber fees. In Europe, they do have direct income from users since a fee, which is split by the telco and the ISP, is built into the phone service. There is no such income in the US. So I really don't see how any of that becomes a great business model.
The "free" ISP model is sometimes compared to network broadcast TV. (This comparison usually avoids mentioning that most TV users in the US now pay even for their "free" local stations.) It's pointed out that NBC, CBS, ABC, and now even FOX, WB, and maybe even UPN give away their content and still make money on it. Yeah. But it's nearly impossible to compare that with the ISP business. A network and its broadcast affiliate control all advertising on the channel. If an ad is shown on KABC, then ABC will be paid for it. That's not at all like what happens with a free ISP. The ad-supported ISPs could only be compared to TV if you were to buy a TV and let the manufacturer squeeze the picture every so often so that the manufacturer could show an ad in addition to those being displayed by the station you're watching. |
