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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Crystal ball who wrote (22060)	6/14/1999 3:36:00 PM
From: David E. Taylor	Read Replies (1) \| Respond to of 41369

Free internet access in the UK and Europe can only last as long as the telcos charge per minute for local calls and the ISP's can cut deals with the telcos for a piece of the revenue. I spent two months in the UK in the summer of 1997, lugged my laptop and a UK phone connection over there, and even by rationing my online time to about 1 hour/day, I spent $80/month on phone charges. IMO, the deregulation of the telcom markets in Europe (which is recent and slowly developing), together with market pressures, will eventually lead to a US style flat rate pricing model for local phone service for internet useage. Why? Because the present cost to internet users severely restricts daily usage and limits the potential of E-commerce and all the other online goodies we take for granted here, and I'm sure this is obvious to European businesses and governments. Once they have competitive flat rate local phone access, ISP's will have to charge for internet access just like they do here, because advertising and other revenues alone just don't provide a viable business model. If they did, free internet access would be the norm in the US also. Dixon's is reportedly going to float a Freeserve offering soon, with an estimated market cap of $750 million to $3 billion. IMO, that's a sure sign that Dixon's realizes they have a small time window here to capitalize on the present subscriber base of Freeserve before the business model has to be radically changed to a fee-based subscription service. In the meantime, AOL needs to play Europe by its present rules. Strike some deals with the telcos, offer free access, make sure there's no US subscriber backlash by using some good PR to explain the market differences, and grow the European subscriber base the same way they grew the US subscriber base, with superior content. David T.