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UK MSN drops Subscription Charges
geoff lane
writes "Recently in the UK there has been a very strong
move towards "free" ISPs. By doing deals with the telecom companies
which split the call charge income between the telecom and
ISP companies the ISPs can drop subscription charges. I've
heard it reported that as few as 10,000 signed up users can
move a small "free" ISP into a trading profit." I guess
I'm not surprised. Telcos are big, how long can it be before
they swallow the ISPs anyway? And how long before it here..."
Many people in Europe have been calling for North American-style free local phone calls, at least to ISPs. I disagree.
I'm probably in the minority here. But let me give my reasons.
First, let's remember that the choice is not actually between free and charged calls. It's between a metered and a flat-rate service. Reducing the telcos profits is an entirely separate question, unrelated to the issue of "free" calls.
I would like to see a per-megabyte, rather than per-minute, charge for internet access. The advantages of this would be
1) It reduces demand to what people really want.
2) It provides an incentive for ISPs to increase their bandwidth up to what customers want to use, because being able to send more traffic immediately increases their revenue.
In my opinion, the main reason that the internet is so clogged up, especially on intercontinental links, is precisely because of unmetered access, so that 1) and 2) don't happen. People have no incentive to control their demand, and ISPs have little incentive to expand their links above what they can get away with.
By reducing the load on the network, everything would work more efficiently. Bandwidth would not need to grow as fast, and the network would be cheaper to build.
So I think the choice is between watching the clock, or a higher flat-rate charge. I prefer the clock. YMMV.
11.0010010000111111011010101000100010000101101000
Demon isn't free. It's ten quid (US$15) per month.
You get a static IP address and free fax-to-email but other than that, it ain't so hot anymore. If it wasn't for the fact that my email and website addresses are so ingrained on my friends and search engines' collective conciousnesses, I would have quit long ago.
If they go free, though... NICE.
--
Andrew Oakley - www.aoakley.com
Ahem...
in the UK we have to pay for ALL of our telephone calls...
The way this owrks is that 1/3 of that cost goes to the originating telco. 1/3 goes to BT for switching it between telcos and 1/3 goes to the terminating telco.
BT is for the majority of calls in the UK both the originating and terminating telco. So they get 100% of the call cost.
ISP's generally receive lots of calls without making any. This means that the receiving telco makes a nice profit on all of those calls. So this sort of profit sharing scheme means that the ISP can cut costs by getting some of that profit from the telco.
I don't know how it works in the states but I would guess that it's not the same.
Although Demon is owned by Scottish Telecom it has its own telco licence, so at a bit of investment (1/4 to 1/2 a million pounds) they can put in a C7 DMSU (telephone switch) and rake in 100% of the interconnect charge. i.e. get the final 1/3 all to themselves.
So technically nobody will be charged more for this, its already included on your phone bill.
-- Under/Overrated is meta-moderation, and therefore is Redundant.
The problem I have with 'Free ISPs' is that they discourage telecom operators from allowing free calls (the real issue).
As the call charges are exactly the thing that is funding the ISP side of the business there is plenty of interest (for the telecom operators) in maintaining the status quo.
I'm sure the majority of European Internet users would prefer to pay £10-£20 a month to an ISP and get free calls, rather than pay nothing to an ISP and pay for per minute access to a telecom operator.
See Campaign for Unmetered Telecommunications for more info.
The free ones where you pay for the phone call are not flaky (in my experience). The free one where you don't pay for the call is flaky, but you get what you pay for.
,hacker Perl another Just)'
I still keep my for-pay ISP for downloads and a decent connection, but try and use my free-free ISP as much as I can.
perl -e 'print scalar reverse q(\)-:
Matt. Want XML + Apache + Stylesheets? Get AxKit.
I now have a 100% free internet connection at home in the UK (well, OK, it's free after 6pm and on the weekend, but that's the only time I'm online). So there are companies out there willing to offer this service.
:)
,hacker Perl another Just)'
The connection is crap - awful in fact. Very slow on the US uplink, but fast enough for long irc sessions. And their modem ratio is 30:1 (increasing to 20:1 this weekend), but I haven't had too many problems connecting (never connects first time at 6pm, but always connects eventually).
However I don't really want to shout out how to get this service. People who know should probably keep it to themselves too - I'd hate for the service to get *worse*!!!
Drop me a line with a good grovelling line, and a great joke, and I'll tell you all the details. (PS: I'm connecting from Linux).
Matt.
perl -e 'print scalar reverse q(\)-:
Matt. Want XML + Apache + Stylesheets? Get AxKit.
Here in the UK, we still get charged by-the-minute for our local phone calls, which works out at about 5p/minute (8c) during peak hours, 1.5p/minute (2.4c) at evenings, and 1p/minute (1.6c) at weekends. Most people's ISP's now use 0845/0345 numbers, which are national numbers, charged at the rate of a local call. Companies who set up 0345/0845 numbers get a share of the money that BT charges the customer, so the 'Free' ISPs make their money from the time that their users spend online.
;-)
Personally, I'd much rather pay a monthly rate, and have flat-rate local calls, or even better - ADSL
cheers,
Tim
Um... I don't think Demon are the biggest (and I speak as a long-term Demon user who's staying with them in the short term, 'cos my email address is too widely known to change). Interesting fact; although these free services (Yanks; remember that we pay for local phone calls in the UK) tend to give punters a CD to install, most of them can be used without the CD after a little fiddling; I regularly use Freeserve from my Linux setup and will be looking at the totally free (0800) services soon to see if I can get them going.
ben_ the technologist and platform agnostic
Telstra is the biggest Telecommunications Network in Australia, and as the market was regulaetd by the government for a vast number of years, they have a complete monopoly on the Telecommunications Industry in Australia.
Having said that, there are many many medium sized ISPs in Australia, but they are unable to compete for the simple reason that if they were competitive, Telstra wuold find a way to tighten the stranglehold on the market, and essentially make the business unprofitable.
Free Internet is very much in its infancy here, but while the telecommunications giant owns the routers, gateways, exchanges and phone lines, I simply cant see Free internet taking off in australia, no matter how many subscribers an ISP obtains
Anyone remember 'Springtime for Hitler'? The musical in The Producers that had to be extraordinarily bad to make its investors rich? Free ISPs charge a hefty premium for support calls. Dixons came in at £1 a minute when they launched Freeserve. It's down to 50p now, but I can't see it going into freefall.
I've tried Callnet and found the service to be reliably unreliable (in the interests of fairness I should add that I've found at least one paying service - u-net - to be equally bad), but I'm always slightly amused every time the line gutters and the little xmessage I've patched into ppp-off tells me that 'Your modem connection has been lost.' Why? Because these guys are the first people in the history of capitalism to make money deliberately and directly by providing a bad service. The worse the service, the more support calls they get, and thus the greater their revenue stream. They only have to bring the service down for a couple of seconds and their little callcenters go ballistic and the real money - the value-added goldmine, the support cashcow - starts rolling in.
Microsoft make money despite providing an unreliable service. They shouldn't find it hard to adjust to this new business model.
Americans don't realise how lucky they are to have true flat rate local calls. That just doesn't exist in Europe.
My ISP charges only $17/month here in France, and that was one of the cheapest. They will offer free access next month. But my phone bill for connections has always been between $100 and $250/month just for the many hours I spend online.
Now at least two big ISPs in France have negotiated with France Telecom to keep a share of the phone charges, which allows them to offer free access. But the free access has a price beyond the phone bill, they have you provide huge amounts of personal informations and prove your identity to sign up. Although it is mostly illegal in France to use these informations for other purposes, these companies are already re-selling the informations to all kinds of mailing lists and marketing companies.
Telecom Eireann in Ireland keeps putting up proposals for flat rate, but not like the american model. They have a plan that adds on to your regular phone bill about $25/month that gives you 50 or 100 hours of calls to a single number of your choice, but excludes ISP dialin numbers. But its a start.
AFAIK these free ISP's are not in any deals with telcos instead they have registered to become a telco themselves so what happens is the person who calls their free ISP is on their telephone network (say BT) and they then call their ISP which is their own Telco. Therefore the customers telco has to split the charge with the ISP for connecting to their network.
Think of this another way. In the UK Cable companies can compete with BT and offer a phone service (and so can anyone else) people on a Cable network can still phone BT and other phone networks but if you're making a call cross network then the two telcos have to split the charge.
So although the ISP's don't offer a telephone service as such they've paid their registration fees and therefore get their cut of the money without charging any more than a local rate call.
Of course support is another matter, most of these free ISPs have terrible support and charge a fortune for it in expensive phone calls. But then not many people need support.
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