In April last year, Carphone Warehouse, a leading phone and broadband company in the UK said it would offer free broadband forever. It signs up customers for its phone service, while giving free broadband access. Things have not been hunky dory for the company, what with it being flooded by requests for free broadband. It was only after it acquired AOL's UK Internet business that it managed to stabilize the demand. And that did come at a cost. While the company had expected costs to the tune of £20 mn for the year ending March 2007, it had already run up expenses worth £70 mn till October last year, just for its free service. Pretty steep price to pay for 'free'.

In India, Bharti too launched a similar scheme in July this year. It's too early to tell what the impact of that is in India. Of course, there is always a limit to this freedom, and it stops at 550 MB, which is a lot for a regular Internet user, but not enough for a gamer, or a movie and music buff.

Worldwide, there are several attempts to give free or subsidized broadband access in various ways. There are free access Wi-Fi spots across the world. The Singapore government runs a program called Wireless@SG within the country that provides free wireless connectivity at speeds of 512 kbps in places with high human traffic. This is for three years, starting end 2006.

Several cities in the US have been dabbling in providing community broadband network, and some of them are free or heavily subsidized. There is St Cloud, Florida. Here the city government launched a city-wide network in March 2006, which is made available to the citizens free of charge. New York City enjoys wireless hot spots set up by a not-for-profit organization, NYCwireless. And there are many others across the US.

The question really is how successful are these free/subsidized initiatives? At St Cloud, it has been pretty successful so far. Within six months of the launch of the services, 77% of the citizens had logged in. And early this year a consulting firm, Novarum, rated the service as number one in the country for 100% availability, beating Cingular, Verizon and other service providers delivering wireless broadband, albeit on cellular networks in the city. The annual network operation cost is claimed to be covered by the tax base, and the savings made on providing municipal workers with free Net access, and increased productivity.

Not all such services have been very successful. There are networks where the connectivity is either slow or not available at all times. EarthLink, one of the oldest Internet service providers in the US, has set up many Wi-Fi networks across the country for municipal broadband access. However, it recently laid off 900 employees, as well as abolished the position of president of municipal networks. This signals that all may not be well with a free/subsidized approach.

So, when India attempts to give free broadband to all by 2009 as the government wants, we need to think hard on the sustainability of the model. Broadband access for all is good for the economy. We will have new businesses shaping up, increased productivity levels, new revenue streams, better informed citizens, healthcare in remote places, and so on.

But what we don't yet know is this: will free really work? And should it be forever? And would free mean bad service? If free translates into tardy service and slow connects it would defeat the purpose. To my mind free does not work. At least not in the long run. Subsidies till a critical mass is built maybe fine but giving stuff away free just devalues it and takes away the energy from the system.

It should be avoided.

Shyam malhotra
editor-in-chief VOICE&DATA
shyamm@cybermedia.co.in

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