U.S. Internet company AltaVista on Monday promised Britons unlimited Web access for an upfront fee of no more than 50 pounds ($79.06), accelerating moves to get more people online by abolishing metered calls.

AltaVista said it will connect people to the Internet via a freephone number for a joining fee of 30 to 50 pounds and an annual renewal charge of 10 to 20 pounds.

Telecommunications watchdog Oftel said the move, which throws down the gauntlet to Internet service providers who charge higher subscriptions or rely on a cut of metered phone calls, was "excellent" news for consumers.

"It shows competition is working," said Anne Lambert, Oftel's director of operations.

Altavista will launch the service within a few months but limit it to 500,000 subscribers in the first six months to ensure it can cope with demand, a spokeswoman said.

The package appeared to set a new benchmark for cheap Web access in the UK, which the government says lags the United States for Internet use because people must pay phone charges for every minute online.

"The idea is to kickstart the industry in the UK," an AltaVista spokeswoman said.

AltaVista is not the first to offer "all-you-can-eat" access but unlike some of its predecessors it has great experience in scaling up services, said Nick Jones, analyst at Internet advisory group Jupiter.

Cable TV company Telewest Plc suffered a series of service failures because of heavy demand when it launched its unmetered package last month. A stream of smaller ventures have suffered similar problems.

Jones said the decision to limit the number of subscribers gave AltaVista credibility.

"If you weren't to limit it, it would smell," he said.

CHALLENGE TO FREESERVE

AltaVista's move challenges Britain's leading Internet service provider (ISP) Freeserve Plc, whose users pay no upfront fees but face phone charges of up to four pence a minute for daytime access. Shares in Freeserve fell four percent by midday.

Freeserve said it welcomed anything that cut the cost of Internet access and that it was working on its own low cost packages.

AOL UK -- a joint venture between America Online and Bertelsmann -- also voiced its support for unmetered Web access and said it was studying the AltaVista move.

"It's an interesting business model and one we will be watching closely," an AOL UK spokesman said.

The charging model pioneered by Freeserve has encouraged millions of people on to the Web, but analysts say the shock of big phone bills has deterred users from surfing for long.

A Freeserve user spends about six hours a month online compared with about 30 hours in the U.S.

British Telecommunications Plc has promised to launch unmetered access in the spring, but its plans have been delayed by a dispute with the regulator and other ISPs.

AltaVista, which is primarily owned by venture capital firm CMGI Inc., said it would make money from advertising and e-commerce as well as the subscription charges. It would not name its telecoms provider, but said it was not BT.

The company has a similar dial-up service in North America, called Free Access, which has two million users and is adding about 10,000 a day, said David Emanuel, an AltaVista spokesman in the U.S.

Unlike Free Access, UK users won't be subjected to a built-in advertising window when viewing Web pages, he said. Emanuel said it might extend the service to other parts of Europe.

AltaVista, which had 54 million users of its search engines and portals worldwide as of January, recently rolled out online services in Sweden, Germany, France and the Netherlands.