Cut-rate Internet

"The Internet still has a lot of bed-wetter types, and they believe it is some God-given right to get electronic information. -Tom Nolle, principal, CIMI Corp.

I tell ya, cyberjunkies don't get no respect. We get disks bound into our magazines and CD-ROMs stuffed in our mailboxes. They all come with shrink-wrapped promises of a free-free-totally-free 6, 10 or 50 hours of use before a low-low-positively-low rate of $19.95 a month kicks in.

And now, the implications of analysts from Nolle to AOL CEO Steve Case are that upon taking advantage of this largesse, we've been selfishly hogging the Net.

This is akin to walking into a bar, proclaiming, "Drinks on me" and then grumbling about all the heavy drinking that's going on.

Amid complaints about busy servers and clogged circuits, the best Case can do is pledge more infrastructure investment and ask users to ration their on-line time. Debate has started as to whether its time to raise Internet access fees or at the very least structure pricing plans that discourage the tendency for users to log on at 8 a.m. on any given Monday and not log off until the following autumn.

As more local exchange carriers begin offering consumer Internet access, News Editor Sandra Guy, in her editorial on page 3, advises them to look closely at some of the mistakes that AOL and others have made in Internet marketing.

And mistakes there were. AT&T Worldnet and AOL should have realized what would happen when they went national with discounted service.

AOL, in particular, tried to be the Wal-Mart of cyberspace. It even comes with an electronic greeter. AOL's engineers deserve some credit for managing to program that saccharine-like cheeriness into a chip-synthesized voice. I'm not sure which came first, but that all-right-enough-already "Welcome! You have mail" reminds me of the automated taxi driver that chirped, "Hi, I'm your Johnny-cab!" in the film "Total Recall." There is no doubt one inspired the other.

Using the Wal-Mart strategy, AOL tried to tank all those small local ISPs by undercutting the market. And while all the talk has been on that $19.95 rate for unlimited access, I don't think that caused the problem as did all those free hours. I know one person who has bragged about using AOL for months on end without paying so much as a dime for it. She just kept installing one new giveaway disk after another and re-registering.

The very least they should have done was do some computer modeling. The whole matter is a rerun of the PCS launch in the U.K. and Israel. In both countries, new carriers inaugurated service with an offer of unlimited free calls for new subscribers. In both cases, service got so congested that few could complete calls.

I disagree with Nolle in that I do not think that Internet users feel they have a "God-given right" to get electronic information. But I do have a right to shop around and a right to complain if I feel that, in its zeal for market share, AOL and AT&T did their customers a disservice.

If the service provider balances marketing with growth, it's been demonstrated that Internet service can be viable at $19.95 a month. Here in Chicago, Interaccess offers fine service and support at that basic rate.

It also offers ISDN and asymmetrical digital subscriber line connections for a higher rate. But Interaccess doesn't give away service.

Then there are companies like UUNet, which position themselves outside the low-end consumer arena. UUNet charges for its software and its access rates are usage-based. The pricing is attractive enough for businesses and more sophisticated consumers, but it serves as a barrier to "weekend" cybersurfers.

The irony is that AOL probably got what it wanted. It is my firm belief that every PC user in the U.S. at one time or another has tried AOL. The problem is that, especially these days, few come away impressed.

It's probably the fact that some AOL customers have gone the lawsuit route that got Nolle's hackles up. It's an excessive move for the little that's involved.

For me, I'd rather write off the $20 or $40, switch ISPs and keep in mind that ultimately, the information highway will be littered with the shells of enterprises that went belly-up when the upward spikes on the marketing forecast charts blinded management to the technological limits of their business.