Free Net access takes toll

Start-up j3 Communications will announce Thursday that it is offering free, unlimited Internet access nationwide--provided that customers sign up with the company as their long distance telephone carrier.

j3 says it will offer Net access at 28.8 kbps to 350 cities worldwide and has the capacity to handle up to 600,000 customers. The company recently began a "soft rollout" of the offer--pitched as "free email, free chat and free newsgroups"--on its Web site, but the official launch is Thursday.

The offer is the latest example of bundling Net access with long distance phone service, the kind of "one-stop shopping" for telecomunications products that has come as a byproduct of telco deregulation. Just last month, America Online announced a bundling deal with Tel-Save, another little-known phone carrier.

"It's shows that there's a competitive market," Audrie Krause, the founder of online advocacy group Net Action, said of the deal, "but there's no such thing as a free lunch." She warned that costs are recouped one way or another, and that consumers must carefully study whether one of these services will suit.

j3's offer also comes in the wake of deals offered by @bigger.net and Cyber FreeWay that offer Net access with no recurring monthly fees. The going rate for unlimited Net access typically is $19.95 per month.

AT&T has offered five free hours of monthly Net access to its long distance customers but is ending the promotion on March 31.

Regional providers @bigger.net and CyberFreeWay make money by selling advertising space on their sites. j3 will not sell ads but instead will try to turn a profit from long distance, j3 president James Wagner told CNET today.

The company charges a flat rate of 15 cents per minute for domestic interstate calls. The charges for intrastate calls differ greatly; they are 12 cents per minute in California but 36 cents per minute in Maine, for example.

Wagner calls the rates "very competitive" with other long distance carriers. AT&T, for example, offers a flat-rate calling plan of 15 cents per minute.

Wagner says j3 has more than 240 local connect numbers, or PoPs, for Internet access. But as with any Net access product, would-be consumers should check the phone numbers listed on the company's Web site to be sure they are not making a long distance phone call every time they log on. Wagner agrees that's a good idea.

The publicity of some of these start-ups has taxed their customer service lines, at least initially. Some customers originally had trouble contacting @bigger.net, for example.

j3 was started last year and is leasing the Internet backbone of PSINet, among others. The company is privately held and won't disclose sales or earnings. It derives its name from the three cofounders, whose names all begin with "j," and is based in Dover, Delaware, which the 29-year-old Wagner calls home.