AltaVista's Unmetered Access Hoax

Altavista was forced to eat crow Monday. As if the Web portal hasn't already had its share of problems, the latest caught-with-their-pants-down episode revealed the company's attempt at passing off vaporware to consumers and the press alike. After weeks of badgering by the British media, led by the irreverent IT rag, The Register, calling on AltaVista to prove its June 30 roll-out of unmetered access in the UK, the deafening silence has finally been shattered. Despite AltaVista's press releases claiming that 100,000 British folks were enjoying its flat-rate Internet service, a virtual manhunt failed to turn up a single participant. AltaVista has finally relented, admitting that its much-ballyhooed service never existed at all.

For millions of Web surfers in Britain, free Internet access is an oxymoron. That's because, while ISPs like Freeserve and America Online may offer free Net access in the UK, Britain's local telcos don't offer unmetered phone service like in the U.S. So, eliminate the $20 monthly Internet access fee, and for Britons, that still means per-minute telephone usage charges applied. So much for free.

AltaVista stormed the barn with its March 2000 announcement to provide unprecedented unmetered access. Half a million consumers signed up for the USD $90 per-year service; but by the June 30 deadline, AltaVista admitted that it could only manage a controlled roll-out of 90,000 users. And that was the last anyone heard, from either AltaVista or any users successfully subscribing to the service.

Leaving the public with the assumption that roughly 100,000 UK Web surfers were experiencing toll-free Internet access, AltaVista remained silent for the next six weeks. Apparently, only AltaVista's UK managing director, Andy Mitchell, could comment on the particulars, and he's been not-so-coincidentally on holiday for the past three weeks. Arriving back just yesterday, Mitchell announced to the public that the decision to terminate the project was made three weeks ago, just before his hiatus. If not for the efforts of news publications like The Register hounding AltaVista to answer claims that its flat-rate access was nothing more than a hoax, the ruse might still be ongoing.

Mitchell places all of the blame at British Telecom's feet, charging the phone company with not offering competitive enough wholesale packages to ISPs to make flat-rate Web access a viable option. But the fact remains, all this bad press could've easily been avoided had Mitchell set the record straight three weeks ago. Chances are, AltaVista was hoping no one would be the wiser; and no one likely would have had the press not taken the issue seriously.

This latest blow runs deep for the last major Web portal standing yet to tap the public markets. Parent company, CMGI , pulled AltaVista's IPO plans earlier this year, in favor of waiting until the monolith was closer to achieving profitability, hopefully sometime by Q4. After having to delay its planned $2.8 billion offering, in the meantime, AltaVista hatched plans to unload its European operations into an offering of its own. The notion quickly made a U-turn, and not a moment too soon, in light of the storm of criticism now raining down on AltaVista, for its UK unmetered access debacle.

Any questions or comments, love letters or hate mail? As always, feel free to forward them to kblack@internet.com.

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