RealTime IT News

Amtrak's Internet By Rail

Select Amtrak lines in Philadelphia and New York are getting ready to test a quasi-free, quasi-broadband Internet service next month, officials said Wednesday.

The Keystone commuter line passing through Harrisburg, Penn., Philadelphia and New York will try out the new service provided by start-up NRoute Communications, giving passengers limited access to e-mail, some online shopping and "transactional" Web sites (shopping channels), with a charge for full Internet access and pay-per-view movies.

Officials aren't sure what the pricing on pay-for-view and Internet access will be as of yet because they are concentrating on the free cable TV-like services tailored to businesspeople -- news, weather and sports. The bulk of revenues, they said, would come from advertisers who sign up with NRoute.

Where have we heard this one before?

Free Internet service, with advertising revenues paying for the service to customers, has been around for years, and all have been a failure. It first started with dial up Internet service providers like Spinway and ZipLink and evolved into broadband with FreeDSL.

The only two national providers offering free connectivity (eight hours a month) are Juno and NetZero, which are now a merged company called United Online, and rely heavily on its premium subscribers to pay for the free service.

Alan Mosher, senior research director of consumer, SOHO and Internet services at Probe Research, said he's real leery of any business model that involves advertising as its basis.

"I've just been looking at AOL's and Yahoo!'s quarterly numbers, and looking at how Yahoo! is trying to diversify its revenue stream away from advertising," he said. "About the only real hope I could see for something like this would seem to be the regional, localized advertising that they might be able to generate.

Robert Lisowski, NRoute president, said his company has roughly a half-year to a year of funding to stay afloat if advertising remains weak in the start-up stage of its new business.

Previous to its free ISP gig, NRoute sold a similar service to the U.S. military, selling its M64 servers, which feature data storage and caching to keep programming on the machine and not entirely reliant on a satellite feed.

He feels once advertisers find out about the service, which is really more of a cable TV service than an Internet service, they'll be receptive to paying for a service that's unique.

"What's really appealing to advertisers is they've got somebody captive in a seat for a period of time; there's not really much else (the passenger) can do," Lisowski said with a laugh. "That's why we feel pretty strong about the advertising model."

The Amtrak test will involve some pretty hefty front-end investment by the train company, though an Associated Press report said the Pennsylvania Department of Transportation floated a $155,000 grant.

The ISP will provide the installation and maintenance for the equipment used in the trains, which comprise of a kiosk-like interactive touch-screen and access point (AP). The AP also acts as a hotspot for laptop users, who will be able to pay a fee to gain full access to the Internet.

Lisowski said the business model is also ideal for inter-city bus routes and airline services, and NRoute is currently in talks with several.