EarthLink discounts networking features

The Atlanta-based Internet service provider kicked off a promotion Thursday, which it hopes will encourage the adoption of home networking as well as its service for broadband access.

Starting Thursday and continuing through March 31, EarthLink will offer its $150 gateway for the wired version of its Home Networking service for free, while the price for its wireless version will be cut in half to $150. The gateway allows multiple devices to connect to one device and share resources, such as printers, scanners and Internet access.

The move comes as EarthLink tries to convert more of its dial-up subscribers, and potential new customers, to its faster broadband access, service that is more expensive. Of the company's approximately 4.8 million subscribers, only 471,000 use high-speed access. EarthLink is trying to keep pace with major competitors such as AOL Time Warner, which has about 33 million ISP subscribers and Microsoft's MSN, which counts over 7.7 million households as members. EarthLink offers broadband access over cable, DSL and two-way satellite networks.

The main focus of the promotion is the sharing that home networking allows, according to Erika Jolly, vice president of brand management at EarthLink.

"We want to raise consumer awareness of the opportunity to share capabilities by reducing the up-front cost on home networking," Jolly said. "We want to maximize a consumer's benefits from broadband access, and we feel that home networking is one of the best ways currently available."

Dominic Ainscough, an analyst with research firm The Yankee Group, said that as home networking moves away from the early adopter group, the promotion is a creative way of attracting more value-conscious consumers. In the technology industry, it's a common perception that early adopters are less price-sensitive when it comes to new technologies. As a result, as a technology becomes more popular companies need to lower prices to appeal to the mass market.

In a recent survey from The Yankee Group, Ainscough said, 70 percent of those who weren't interested in home networking cited "no need" as the primary reason for not wanting a home network. Ainscough said he didn't think the promotion would lead to a higher adoption of home networking or broadband access.

"Increasing adoption is not about price," Ainscough said. "Only 20 percent said price was an issue. The real issue is marketing. All the ISPs have to do a better job of communicating to consumers why this stuff matters and what the benefits are."

The education of home networking should come from ISPs rather than retailers, Ainscough said, because ISPs have more direct contact with consumers and should better understand their needs.

The wired version of EarthLink Home Networking enables sharing of resources over a home's telephone wiring or Ethernet. The wireless version of EarthLink Home Networking adds the ability to connect resources throughout the home using an 802.11b technology antenna.

The promotion consists of a $50 price reduction on the gateway, which the company has not set an end date for, as well as a $99.95 rebate that ends March 31.

Earthlink recently started a promotion for its DSL service as well; new subscribers get the first three months for $22 per month. Normally, EarthLink's DSL access costs $50 per month and its dial-up service costs $22 per month. An end date for that promotion has not been set, according to company representatives.