The Web portal, which will end the service Dec. 10, said it has been "forced to discontinue this offering because the company who provided the service and telecommunications infrastructure for it, 1stUp Corp., is going out of business," according to a notice sent to AltaVista members.
"1stUp offered the telecommunications infrastructure required to run the service," said Jim Shissler, a AltaVista spokesman. "We were sad to see them go" out of business.
Last month, AltaVista's parent, Net holding company CMGI, announced it would wind down 1stUp.com, its free ISP. The Andover, Mass.-based company blamed the planned closure on an unhealthy market for online advertising and "insurmountable" capital costs to maintain the business.
Other free ISPs have exited the business or have been acquired in recent months. On Monday, Kmart's BlueLight.com said it is acquiring the Internet service assets of free Internet service provider Spinway.com.
On top of its partnership with AltaVista, 1stUp.com had offered its services via deals with Excite@Home and Lycos, among others.
AltaVista said the change would not affect the availability of its Internet search services.
The move follows announcements of staff reductions and restructuring plans at the company.
AltaVista in September trimmed its work force by 25 percent, or 225 people, to focus on its namesake search engine and speed profitability. At the time, the company said it planned to consolidate its California operations into its Palo Alto headquarters.
The recent changes and layoffs are indicative of AltaVista's attempts to find its place in a highly competitive market. The company is pushing to become a challenger to popular rival search services such as Google and GoTo.com.
In its notice to members, the company said that although it had sought another supplier to provide free Internet access, it was unable to find a service that could meet its customers' needs.
AltaVista, which unveiled its free Net access in July 1999, said it has arranged to assist U.S. members who would like to move to MSN's service.
For a limited time, customers who shift to MSN will receive three months of free, unlimited Web access. After that period, the service would cost $21.95 per month.
"I wouldn't say (AltaVista) is out of the free ISP (market) altogether, but we're out of it for now," Shissler said.
In the last 30 days, AltaVista had about 1 million members using its free service, according to the company.