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AOL Europe mulling free service

AOL Europe, a venture of America Online and German media group Bertelsmann, is considering a "free" Internet service in the United Kingdom that may use Netscape as its brand.

AOL Europe, a venture of America Online and German media group Bertelsmann, is considering unveiling a "free" Internet access service in the United Kingdom that may use Netscape as its brand.

An AOL Europe spokeswoman, responding to reports from Germany's Der Spiegel magazine, confirmed the company is "very seriously considering" a "free" ISP offering in the United Kingdom. Although the company has not decided on a name, the spokeswoman said there is a "strong probability" that Netscape would be considered. However, she added that any discussion of a Netscape-branded service remains speculative.

"We would do it with a complementary brand that isn't AOL or CompuServe," the spokeswoman said.

The service could launch as soon as August, according to Der Spiegel.

The move would signal AOL's attempt to compete with the spate of popular "free" services that have been cropping up in the United Kingdom. So-called free ISPs in Europe offer Internet access without subscription fees. But Europeans pay a toll for their phone usage while they are logged on to the Net, and the "free" services get a cut of those charges.

AOL U.K. members pay a monthly $16.25 subscription fee on top of their local phone charges. But ISPs such as Freeserve are outpacing AOL in signing on new subscribers. Since its September, 1998, launch, Freeserve has become the largest ISP in the United Kingdom, with 1.5 million subscribers, according to Jupiter Communications estimates. AOL U.K. has 600,000 members.

Even with the trend toward subscription-free services in Europe, analysts say users in the United States probably will continue to pay subscription fees for the near term.

"We are a ways off from free Internet access from someone like AOL in the United States," said Melissa Bane, an analyst at Yankee Group.

Free services that are supported by advertising have come and gone unsuccessfully in the United States in the past. But recently some new services have surfaced, with updated business models, attempting to make a go at free Net access. NetZero, for one, got rid of set-up fees. Others, such as Enchilada and InterSquid, offer a PC and Net access for a relatively low monthly fee. AOL itself is mulling a deal to market itself with free PC provider Microworkz's desktop.