Despite Service Concerns, Free ISP Market to Triple

Most Internet users are better off paying for an ISP than using a free one, according to report by International Data Corp. (IDC), but the Strategis Group predicts the free ISP services market will triple by 2005.

In its report “The Free ISP Experience,” IDC tested the user experience of several free ISPs, including: BlueLight.com, Excite FreeLane, Freeinternet.com, Juno, NetZero, and WorldSpy.net (now defunct).

“Free ISP services fared pretty dismally for the most part,” said Steven Harris, research analyst with IDC’s Business Network Services research program, who conducted the tests. “With few exceptions, free ISPs have a long way to go to meet even the low expectations of US ISP consumers, especially as they attempt to get started.”

While consumers may be saving in the wallet, they pay for free ISPs with their time, the report found. The time needed to download the dial-up software was often lengthy. Users are also often required to complete a lengthy form with demographic information before they can use the service. Delays can also be expected when logging in, and from slow connection speeds.

Another common drawback of using free ISPs is advertising, which is often their source of revenue. Most use a bar across the screen to show the ads, but they often cover some of the content on Web pages, forcing the user to move the ad around the page.

“What ISPs must keep in mind is that the point of getting online is to be able to see the content,” Harris said. “Interfering with that essential point lessens the quality of the experience.”

IDC’s report recommends that Internet users who refuse to pay for Internet access should subscribe to several free ISPs so a backup is always available.

Despite the less-than-glowing reviews from IDC, the report “Residential Internet Access: The Free ISP Model,” by the Strategis Group predicts the market for free Internet access services will more than triple by 2005. The report found that 12 million users now access the Internet via a free, advertising-supported service. It expects that number to grow to 37 million by 2005 and will represent about 23 percent of all residential Internet users.

“Ad-supported Internet access providers have made an auspicious debut in the Internet Service Provider industry, attracting subscribers, investment capital, and attention,” Cottrill said. “Free ISPs now must focus their efforts on demonstrating that the millions of subscribers they serve can be translated into a profitable, long-term business. The market appears receptive to free access offerings, and the potential for expansion is great, but free ISPs must overcome many operational and financial obstacles to achieve longevity.”

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