It may be free, but it doesn't stop us wanting even more

Whatever you offer, you have to be able to cope with heavy demand

IT WOULD be against human nature not to want something for nothing, and all the developments of the past 18 months in the Internet space have succeeded to instill a "if it isn't free, it isn't worth it" mentality. Human nature deems that once we're given something for free, we invariably expect something else to be added to the bounty, until the whole shebang is offered to us for free.

IT WOULD be against human nature not to want something for nothing, and all the developments of the past 18 months in the Internet space have succeeded to instill a "if it isn't free, it isn't worth it" mentality. Human nature deems that once we're given something for free, we invariably expect something else to be added to the bounty, until the whole shebang is offered to us for free.

As a result, the goalposts have moved so far apart that Internet companies are forced to keep looking out for the next bit of added value.

The danger, of course, is that companies end up putting serious pressure on their commercial department to bring in the much-needed revenues to silence the impending profit warnings. The past couple of weeks have seen a flurry of goalpost shifting; two Internet service provider (ISPs) have come out with business models for toll-free Internet access.

British Telecom (BT) and America Online (AOL) are said to be looking at 0800 models. Encyclopaedia Britannica decided that the only way for it to compete in the Internet space was to offer all its 32 volumes for free, and the big high street retailer, WH Smith, has said it will soon offer free Web kiosks in stores. As always, all is not what it seems.

Rule number one is to ensure that whatever you offer, you have to be able to cope with heavy demand. Britannica has learnt its lesson the hard way, underestimating how many people would visit its website within hours of the announcement. Something like a mere 100,000 people have managed to access the site out of an estimated 10 million a day.

Needless to say, the site crashed and was down for over a week, prompting a wave of negative publicity. Britannica has now declared that people can start accessing the site again, albeit in a metered, steady flow. WH Smith could face similar problems with its Internet kiosk system, which, from December, will allow customers to access e-mail and the Web for free.

While the retailer is obviously hoping that people who visit the store to use the kiosks are likely to buy something, it could end up with egg on its face when it realises that most people will go to stores to use its kiosks just for checking e-mail and then leave, having bought nothing.

Rule number two is don't hint at something that you will never stick to. BT has been at it again, hinting at cutting charges for Internet access and saying it was "in active talks with the Regulator [Oftel], industry and Government", but then quickly denying suggestion that it was about to undertake a "dramatic U-turn" in pricing policy when it could easily offer a cheap, unmetered flat-fee service.

BT is also under fire about its ADSL policy, upping the price to £50 per month and cutting the amount of bandwidth fourfold to 512Kbps.

Personally, I'm holding out for the standalone cable modems, due to hit the market at the start of next year, which are likely to be priced at the more realistic £30 per month for unlimited toll-free access.

Can CallNet cope?

Meanwhile, the free ISP rollercoaster ride is showing no signs of stalling or buckling under the pressure of fickle joyriders squeezing what they can out of the service providers: 18 months on from when the first free ISPs hit the market, they've become dull - yes, we've all now got free access; yes, it seems like it's been around for ever; yes, we now expect much, much more from; and yes, it's about time a decent move was made to narrow-band 0800 access.

At the last count, there were around 320 free ISPs operating in the UK, and the six million or so homes with Internet access are spending bucketloads on call charges each month, myself included. Which is why I'm intrigued by the news that CallNet is offering 0800 internet access from today, 24 hours a day, seven days a week.

So, what's the catch? I was told there wasn't one, and that I wouldn't have to transfer my phone provider over to a telco that can only deal with 100 customers at once.

CallNet says it will be able to subsidise the free Internet access by the commission it receives from BT on switched voice calls - when users connect to its network by dialling 145 before phone numbers.

From what I've heard about CallNet and its network backers, North American Gateway (NAG), the service is generally reliable and according to NAG, could cope even if every single household in the UK (23 million) registered for CallNet 0800. However confident NAG may be, it remains to be seen whether it can cope with demand for such a completely free service, particularly since its press release states that it expects just 200,000 registrations by the end of the year. Somehow I think that it will achieve this figure in a few weeks and, if it can match demand, have at least a million people signed up by Christmas.

While CallNet is definitely going the whole hog, another British company, Stray Duck, is claiming to offer users a completely free ISP service, although the small print reveals that 0800 access will only be offered every three weeks, with the amount of free access given based on the average amount of time spent paying to get online in the preceding weeks. Still, I guess Stray Duck does qualify for a commendation as it is bringing another free access model to the market.

Sky's not now

Over at satellite broadcaster, BSkyB, where ex-BT man John Swingewood is finding his feet, a number of meetings are going on to try and make some sense of Sky's online strategy. SkyNow was meant to be the unifying ISP and portal, but from what I hear it has not lived up to its expectations.

Bringing back memories of another Rupert Murdoch-owned company that dropped the currant bit of its bun and did a strategy U-turn, SkyNow is tipped to ditch its unnecessary Now bit.

I hear Sky Computers has made a neat little bundle of cash from the change of strategy, netting a £500,000 gift from the sale of Sky.com to Murdoch; peanuts compared with the reach it gives him on the global Internet market.

Rule number three is to realise the potential and, sting the big boys for all you can get.