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Spinway sees itself as answer to ISPs' payment problems

The free Internet service provider believes it may have found a way to team with its subscription-based cousins by helping them recoup losses on customers who don't pay their bills.

Free Internet service provider Spinway.com believes it may have found a way to team with its subscription-based cousins by helping them recoup losses on customers who don't pay their bills.

Spinway said it has started a program that offers fee-based ISPs a co-branded version of its service aimed at paying customers who are either late on their accounts or threatening to cancel their subscriptions. Collection fees account for roughly 20 percent of all ISP costs, according to Dan Robinson, chief executive of Spinway.

Like other free ISPs, such as NetZero and CMGI's 1stUp.com, Spinway's service is underwritten by advertisers.

To receive the free service, users have to provide detailed information about themselves and agree to have their Internet activities tracked. Advertisers then use the data to serve targeted advertisements on a special ad window on the browser.

Although ISPs have struggled with ever-shrinking margins, some analysts were skeptical that ISPs would turn to Spinway as a solution.

ISPs need to maintain a paying subscriber base to offset network management and other overhead costs, according to Joe Laszlo, an analyst at Jupiter Communications. Laszlo questioned whether getting a cut of advertising revenues would make up for non-paying users eating up bandwidth.

"I would tend to see big national ISPs being leery of this prospect," he said. "For most ISPs, maintaining a payment relationship with all subscribers is the major piece of the ISP's value."

Nevertheless, Spinway's see year in review: Piling onto the free ISP
bandwagonRobinson maintained that partnering with his company could serve as an ISP's safety net to catch users attracted to free ISPs.

"If we can take away customer support, and we handle all billing and get a hybrid model, basically we can keep them in the business and keep users happy because they don't have to change their email address," he said in an interview.

Spinway also powers BlueLight.com, Kmart and Yahoo's free ISP service.