California firm promises free DSL service

A California company is proposing to give consumers free DSL (digital subscriber line) Internet access in exchange for their privacy.

Broadband Digital Group today announced FreeDSL, a service that will provide consumers with free DSL access if they give Broadband "basic demographic and geographic information," and agree to the constant display of a navigational bar on their computer monitor through which advertisers can deliver messages as long as the user is online. Advertisers will tailor their ads based on the basic information users give to Broadband Digital Group, and users may also be asked in the future to divulge "more detailed personal information," according to a statement from Broadband Digital Group.

Broadband Digital Group could not be reached for further clarification, but the company's privacy policy is clearly stated on its Web site: "Since BDG is providing you with the valuable DSL services free of charge, BDG reserves the right to disclose or disseminate any and all personal information gathered directly or indirectly from you or about you to third parties without your prior approval."

Customers for whom that sounds like a fair exchange will receive free high-speed modem, a free POP3 e-mail account, and the Browser Assistant software which will display the navigational bar, according to the statement. The navigational bar can be positioned anywhere on the user's screen but cannot be closed and must remain visible so that advertisers can place their ads there, the statement said.

DSL access typically costs between $US40 and $60 per month, but free DSL may not be as enticing to consumers as it may appear at first, according to one analyst.

"At first look it has a wow factor, but users would be giving away quite a lot" in terms of privacy, said Brett Sheppard, an analyst with TeleChoice.

Many companies have persuaded consumers to share personal data, but companies such as Internet audience research firm NetRatings aggregate that personal data to discern overall trends, rather than link an individual to specific information, Sheppard said. "They're not producing information that Mr. Jones on Pine Street went to XYZ porn site yesterday."

Broadband Digital Group appears to plan to provide individual results to advertisers and others, and that may be sufficiently unattractive to consumers to limit the appeal of the FreeDSL offering, according to Sheppard. "That would be very distasteful for many users," he said.

Moreover, DSL service is becoming standard in most metropolitan areas, with concomitant price drops and the rise of value-added services, such as virtual private networks, according to Sheppard. As pricing continues to drop and the importance of value-added services increases, consumers may be less willing to exchange their privacy for simple DSL access, he said.

FreeDSL is the brainchild of Ryan Steelberg, co-founder of the online advertising entity AdForce, which was acquired by CMGI Inc. last year. So far, Broadband Digital Group has secured US$3 million [M] in initial funding from IMI IV, an Orange County, California venture fund, according to Broadband Digital Group. While consumers are the first target of FreeDSL, the company plans to make the service available to businesses as well as part of its goal of becoming the largest high-speed interactive network offering video-on-demand, pay-per-view, online gaming and IP telephony services, according to the statement.

But Sheppard said that business users may be harder to convince than consumers. Most companies will probably decline to have their workers distracted by advertising messages, he said.

"Having a free service in return for captive advertising is not going to be attractive to them," Sheppard said.

By day's end, an apparent competitor to FreeDSL had emerged. Staruni said that it also would offer free ad-supported DSL this year. The serivce initially will be offered only in southern California.

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