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.
