The telephone toll


David Brake
January 19, 1999 1:00AM (UTC)

| LONDON -- I live in a third world country -- at least as far as the Internet goes. Last month I paid more than $150 for my Net access. I was almost resigned to this fate until I returned for Christmas to Canada, where I used to live, only to find that almost everyone I knew had signed up for either DSL, which offers high-speed Internet service over normal phone lines, or cable modem Internet access. Even my Dad is surfing at 10 times my speed, for just $25 a month.

Of course the backwater I live in has its compensations. My home is London, capital city of Cool Britannia. Samuel Johnson said, "When a man is tired of London, he is tired of life; for there is in London all that life can afford." True enough -- but an Internet life of North American standards is only barely affordable.

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If you wonder why you don't see more people from outside North America online, there is one simple reason -- local telephone charges. Here in the United Kingdom, you pay $3.88 an hour between 8 a.m. and 6 p.m. for any local call -- if you sign up for the maximum discount level British Telecom could supply (costing another $3 a month), you can get that down to $2.90. Even the briefest of phone calls will still cost 7 cents, and telephone line rental costs a further $14 a month (though if you have cable it can cost you less).

On top of that, of course, you need to have signed up with an Internet service provider -- an account with UUNet, which mostly caters to business, costs around $25 a month. With prices like these, it is a wonder anyone uses the Internet at home at all. Overall, some 80 percent of Europeans without home Internet access said in a recent study that they were unlikely to get it -- if they were offered Internet without a per-minute phone charge, 40 percent said they would be likely to sign up.

Erol Ziya of the British-based Campaign for Unmetered Telecommunications says that the high cost of Internet access is more than just a consumer pricing issue. "Some of our strongest supporters are the disabled and the unemployed. Many of the disabled people we speak to say they have no access to the world except through the phone and the modem -- charging by the minute is a severe detriment to the quality of their lives."

Metering Net usage via per-minute phone charges doesn't only boost European Net users' phone bills -- it affects the nature of their online experiences. Forget surfing and schmoozing; we must get in, get our information and get out.

Without the opportunity to choose a flat rate, users here and across much of Europe always feel themselves racing against the clock. Instead of logging on and simply following links that look interesting, I find myself rigorously planning my online experience: I dial up and start several browser windows going at once. I skim the text of each page hurriedly, follow any "must read" links, log off, then read what I have downloaded. A slow download speed is doubly frustrating -- not only does it leave me looking at a blank screen, but I end up drumming my fingers waiting to be able to log off.

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Recreational Web surfing has to be squeezed in at off-peak hours, or on office lunch breaks. Only 28 percent of European Net surfers said they had visited entertainment Web sites in a recent survey. Downloading large software demos is much less tempting (which may explain why nearly all computer magazines here contain bonus CD-ROMs full of trial software).

Ziya's experiences bear this out. He is one of the lucky ones: His cable company experimented with free local calls inside its franchise, and he is now one of the DSL trial customers. But his first year of Internet use three years ago was metered, and he remembers being "very aware" of the cost.

His phone bill doubled, and he found himself using the Internet just for specific tasks rather than browsing around -- typically for three or four hours a week. "Quitting the Internet altogether was always in the back of my mind, particularly when I became unemployed," he said.

"Before I had flat-rate access, I wasn't really using the Internet as a communications tool, except for e-mail," he said. "Now I use it primarily to interact with other human beings, whether through gaming, ICQ, IRC or other programs. Before, it was primarily an information-seeking tool."

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DSL or cable modems could offer heavier Net users cost savings as well as significantly higher speeds, since they won't usually be billed by the minute. But across much of Europe, including the U.K., the technologies are still at the trial stage.

There is some dispute over whether the U.K. market is ready for such "broadband" services. One cable company exec said that its research found customers were "gagging for" cable modem access, and the 40 customers they offered a test service to in 1997 were "more than a little pissed off" when the trial ended.

British Telecom, which is conducting a 2,000-household DSL trial in London, seems less convinced. Simon Brooks, a marketing manager for the company, says, "If we perceived there was a massive demand now we would roll out very quickly. We believe in two to three years, demand will be much greater. We're not going to be rushed into launching the services earlier than we believe prudent." It looks as if, at least in the U.K., even major metropolitan areas will have to wait until toward the end of this year for any sort of broadband access.

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Of course, I have painted a deliberately gloomy picture so far. If you can wait until after 6 p.m., you can get online in Britain for not much more than $1 an hour -- and during the weekend prices decline to as little as 70 cents an hour. Recently in the U.K., several "free" Internet service providers have emerged and are taking a large chunk of the market. Freeserve, the first of them, has quickly become the largest ISP after gaining 700,000 active subscribers in only four months. The company says 40 percent of its customers have never used the Internet before.

The Internet access offered isn't truly free, to be sure. Freeserve and other such services don't charge users fees because they can recoup much of their costs from a share in the phone revenues (though some customers have also voiced alarm at charges of as much as $1.60 a minute for calls to their technical support lines). British ISPs don't limit the number of hours you can spend online anymore; they don't have to -- the telephone companies do that job for them. Thanks to this recent development, those who stay online for less than 10 hours a month are getting a better deal than most North American consumers.

Elsewhere in Europe, the picture differs widely, and a few people have an easier time. In the Scandinavian countries, where the telecommunications infrastructure is highly developed, Net access of all kinds is cheaper and more prevalent -- even more than the United States in some cases. In Germany, nearly one in five phone users has adopted ISDN (a digital phone-line service that can deliver both voice and data).

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According to BMRB International, a market research firm, more than half of the Swedish population, nearly 50 percent of Finns and 46 percent of Danes have used the Internet. Nonetheless, in most European countries Internet users are even worse off than they are here in Britain: According to BMRB's numbers, just under a third of the U.K., the Netherlands, Ireland and Austria have used the Internet; in France and Belgium it's a quarter, and a fifth in Germany and Spain. Only 19 percent of Italians have ever used the Internet.

Given the high cost of phone service, it's not surprising that 1998 saw a series of "cyberstrikes" across the continent by disgruntled Internet users. In September and October, several Spanish Internet groups urged Internet users to stay offline for a day to protest a planned rate hike and plead for a flat-rate tariff for Internet calls. Though they didn't get a flat rate, they did persuade Telefonica de Espana, S.A, which has the monopoly on local-rate calls, to offer discount plans.

In October, Italian users also registered their discontent and won similar concessions. Soon protest spread across Europe. By the end of the year protests had taken place in the U.K., France, Germany, Italy, Czechoslovakia, Switzerland and Poland. The Campaign for Unmetered Telecommunications now plans to bring together campaigners from across Europe for a strike in the middle of 1999 and has set up a site to coordinate the protest. A group of French cyberstrikers, the Association of Unhappy Internauts, demonstrated in mid-December and has already announced a second strike for the end of January, demanding a flat monthly rate of $36 for local calls.

There is a big "chicken and egg" problem for much of Europe. Fewer Internet users means less local content, which means Internet providers have to purchase expensive trans-Atlantic bandwidth to the U.S. to give their customers access to the data held there. And because European users have much more limited access to content relevant to them, like TV guides, events listings, local news and sports, the Internet is less appealing, so growth remains slower.

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Language is another obvious barrier, given the English-dominated nature of the Internet, and the difference in time zones means anything "real-time" like chat rooms, live broadcasts and online gaming are all less convenient for Europeans. There are also substantial barriers to Internet shopping. American Web sites often sell products at significantly lower prices than Europeans often have to pay, but some don't sell outside the continental U.S., and those that do usually charge much more for overseas delivery, which can also take longer (sea mail can take eight weeks). Even bill payment can present a problem, as customers nearly always need credit cards, and these are still in less widespread use in Europe than in America.

Whatever the problems, it is clear to European leaders as it is to North Americans that the Internet will be central to future economic development, and there are already some hopeful signs.

In Ireland, an Advisory Committee on Telecommunications recommended a decrease in the price of Internet access and urged the main telephone company to consider flat-rate Net access. While it has yet to back fixed-price Net access, Telecom Eireann has announced new, lower-priced rates for Internet users. Here in the U.K., the government advertised in November to fill the post of "Digital Envoy" -- an official charged with boosting e-commerce and Internet use.

Meanwhile, in Germany, a pair of inventive private-sector companies have found a way to give surfers what they want. A German magazine, Tomorrow, has just teamed up with a telephone company, Mobilcom, to offer a limited flat-rate service. For $45 a month (ISP and telephone charges combined), users in major cities across Germany can dial into the Internet as long as they like between 7 p.m. and 7 a.m. weekdays and all weekend. Outside those times they pay as little as $2.90 an hour.

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It may not amount to a bargain in American terms, but it is a start.


David Brake

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