Free Net Service 1 Year From Now

RISING TREND: FREE ACCESS TO THE INTERNET

Free access is not just taking off in Europe. It’s becoming a way of life here in the States. Here’s two stories to support this – and more will be on their way.

Market research firm Datamonitor predicts that all Internet service will be free of charge by Christmas 2000, barely four years after all customers were charged by the hour.

Datamonitor analyst Rob Shavell told MWT, "I think, pretty much, everybody is going to go to a basic rate-free plan, just like broadcast television versus cable, but they’re going to focus on DSL (digital subscriber line) and other premium" services. In less than two years, free Internet companies such as Netzero have signed up 3.5 million new customers. Free Internet service is a certainty, says Shavell, author of a Datamonitor research report "The Future of the Internet 2nd ed."

Sluggish growth in the number of new Internet users, lower ISP (Internet service provider) costs and the skyrocketing popularity of e-commerce are other factors pointing toward free rides on the Internet, he says.

"AOL would like everyone (especially investors) to believe that the market cannot bear the burden of free access but it can, it will, and AOL will be forced to offer free service," Shavell said. "The only thing holding back older AOL users from switching to a free service may be the pain of losing their e-mail addresses."

New agreements between Yahoo and KMart, AOL and Wal-Mart, and Microsoft and several retailers offer free or greatly reduced-price Internet service.

For several months AOL subsidiary Compuserve has been offering PC buyers $400 rebates for subscribing to its service for three years.

"You’ve got to hand it to Bill Gates, who said years ago that bandwidth should be free," said Shavell.

Datamonitor is on the Web at http://www.datamonitor.com

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Kmart Corp. [NYSE:KM] showed off its strategy recently for keeping the attention of its bargain-conscious shoppers by unveiling a much-anticipated e-commerce venture complete with free Internet access for its customers.

The nation’s third-largest retailer teamed up with Softbank Venture Capital to create BlueLight.com, a destination that helps make up some e-commerce ground lost to front-runners Wal-Mart Stores Inc. [NYSE:WMT] and Sears, Roebuck and Co. [NYSE:S] in the "clicks-and-mortar" race among the largest retailers.

As the result of a deal with Web portal Yahoo Inc. [NASDAQ:YHOO], BlueLight.com users will find themselves surrounded by co-branded content and services within Yahoo’s customizable My Yahoo pages.

All users of the free BlueLight.com services will see a co-branded BlueLight.com/My Yahoo start page when they log on, serving up their personalized news, sports and weather, alongside featured BlueLight.com products. Users can also seamlessly sign up for a Yahoo Mail account and use Yahoo’s instant messaging service once they’re up and running with BlueLight.com.

The BlueLight.com online store and free Net access service will be promoted on Yahoo’s own shopping site and marketed to Kmart’s customers through in-store promotions and circulars. Beginning in February 2000, the company said, the free Internet access software will be distributed in CD ROM format at 2,177 Kmart stores.

Shoppers can download the software now by visiting the BlueLight.com Web site.

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