Make the Internet cheaper!

When his roadshow trundled into town this week, Intel boss Craig Barrett became the latest industry bigwig to demand cheaper calling charges in Europe, saying the continent risks missing out on the full benefits of electronic commerce if costs aren't reduced.

And he's got a point. Whether you see Intel as central to developing ecommerce or not, a lot of people in Europe are holding back from going online because of the costs involved.

It's not just a case of buying a PC - which is getting cheaper every month, as Intel knows all too well. It's more a case of ongoing cost, something that vendors constantly preaching the Gospel according to 'Total Cost of Ownership' should know about.

This month in the UK three major commercial schemes have been announced trying to make it easier for consumers and small businesses to make it onto the Internet.

BT launched its Home Highway and Business Highway services for consumers, teleworkers and small and medium sized enterprises. Dixons launched an ambitious scheme offering consumers free Internet access through a joint venture with Energis' Planet Online subsidiary. And the last day of the month sees the birth of BT Click, a pay-as-you-surf service that requires no Internet service provider (ISP).

So which of these services will do the most to satisfy Mr Barrett - and more importantly, potential Net users - by making it easier to get online?

The Highway services split a regular copper phone line into four sockets: two analogue for phones and faxes, and two digital, offering 64Kbps ports for two PCs or a single 128Kbps connection. Sounds good - but the costs are likely to be at least three times higher than using a regular 56K modem connection, and that's excluding connection charges.

Even if significant numbers go for this service, where does this leave the future pricing of high-speed DSL (Digital Subscriber Line) from BT? DSL - like ISDN for so many years - is likely to be perceived as a premium service, with prices to match.

Some observers have doubted whether Dixons and Planet Online - not an ISP known for serving consumers - can make money without subscription charges, but instead rely on sponsorship, attracting people to Dixons stores, and offering expensive technical support. Time will tell.

And BT Click, which costs a small amount on top of normal phone charges, has been the most controversial of these new schemes. Some ISPs and the ISP Association, have complained to Oftel, the UK telecoms regulator, that Click will allow BT to use its billing records to identify frequent Net users and target them with Click, or offer heavy Click users the full BT Internet service. The fear is that long-term users will shun smaller ISPs, putting some out of business, and reducing competition.

However, Oftel director general David Edmonds has made it clear that BT will not be allowed to cross-market its services and the bosses of the largest ISPs are not particularly worried about Click. "Some of the ISPs are being a little immature," one executive told Silicon.com. "If it gets more people on the Net, it's a good thing."

If anything, these services show the companies involved understand that getting more people online isn't just about call charges - convenient, high-speed value for money services are just as important. But no service currently satisfies all these criteria.

And as long as the dominant players make sure European users get ecommerce enabling technologies such as DSL and cable modems a year behind users in the US, then Europe will remain a year behind. However often the big US bosses choose pay us a visit.