Virgin on the ridiculous? Well actually, no

When two of the companies who had their fingers burnt in the recent unmetered net access fiasco announce details to take their partnership "to the next level", users are entitled to be sceptical.

And when they declare they will concentrate on 'core strengths', the natural reaction is 'what core strengths?'.

But the truth is NTL and Virgin's decision to take their Virgin Net joint venture one stage further not only makes sense, it also follows a precedent set by ISP king, AOL.

Virgin Net's success, as with most other ISPs, depends on creating a community around its portal. In this case the entertainment-focused site boasts 500,000 active users. Not bad in four years. NTL currently owns 49 per cent, Virgin 51 per cent.

Under the proposed move, Virgin will own all of Virgin Net's content and ecommerce business while NTL gets the ISP itself. And that's what they mean by core strengths.

Virgin has a track record in retail. It has global brand recognition only bettered by the likes of Coca-Cola and Microsoft. And it has proved in the lifetime of Virgin Net that it knows where to go for content with mass consumer appeal.

NTL, meanwhile, is an infrastructure company with a very promising future.

Certainly it failed to cover itself in glory over unmetered access - when its ntlworld service creaked into action in April, 131 customers complained to the Advertising Standards Authority (twice as many, incidentally, as those who complained over Hoover's infamous free flights offer).

But it has one major advantage over competing ISPs in the UK - it owns its network, and as such is not so reliant on BT.

It also knows the consumer internet won't always be about the PC - its broadband cable network points to a future where the internet and television converge.

A few years back AOL turned to Worldcom to provide the underlying infrastructure for its service. It was one of its smartest moves. Despite recent embarrassments, it seems Virgin and NTL have learnt something along the way.

For related news and analysis:
'NTL poised to survive ISP shakedown with Virgin buy' http://www.silicon.com/a38847
'Net access: limiting the unlimited' http://www.silicon.com/a38621
'Leading ISPs pull plug on unmetered net access' http://www.silicon.com/a38630
'NTL could be real winner of Orange sale' http://www.silicon.com/a37756