CMGI, ALTA - AltaVista opens Italian Web site and search engine - 500 Beiträge pro Seite

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AltaVista opens Italian Web site and search engine


MILAN, March 1 (Reuters) - Internet search engine AltaVista Corporation said on Wednesday it has set up an Italian subsidiary called AltaVista
Italia to launch an Italian-language Web site and search engine in the next few weeks.

Marc Fleishhacker has been named Managing Director of AltaVista Italia, Davide Corcione has been named Marketing Director, Massimo Rovelli
is Business Development Director and Cristina Tagliabue is Content Manager, AltaVista said.

The statement provided no other details.

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AltaVista offers free UK tel access to net -paper


LONDON, March 5 (Reuters) - Internet search engine AltaVista Co, mostly owned by venture capital firm CMGI Inc <CMGI.O>, is to enable
Britons to surf the net free of telephone charges after paying a one-off fee, a Sunday newspaper reported. The Sunday Times said AltaVista would
charge a one-off fee of about 30 pounds sterling ($47.39) which would afterwards enable people to dial into the service free of charge.

The report said the service, to be launched in the next three months, would be limited to about 500,000 subscribers in the first six months to keep a
lid on demand.

The company aims to cover costs through advertising and e-commerce, the newspaper said.

"The U.K. is still lagging behind the U.S. when it comes to exploiting the Internet, and this is mainly caused by the high phone charges imposed by the
likes of BT ( British Telecom <BT.L>," the paper quoted AltaVista UK managing director Andy Mitchell as saying.

AltaVista said British web users have to pay an average of 126 pounds sterling ($199) annually in local connection fees, while local calls are free in
the United States.

($1=.6331 Pound)

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AltaVista to offer UK free Internet access after fee


NEW YORK, March 5 (Reuters) - Online search engine AltaVista Co., said on Sunday that within two months it will offer free access to the Internet in the United
Kingdom without telephone charges after a small, one-time fee.

AltaVista, which is primarily owned by venture capital firm CMGI Inc. <CMGI.O>, will charge a one-off fee of about 30 pounds sterling ($47.39) and will not
subject users to built-in banner ads, said David Emanuel, an AltaVista spokesman.

"It is our intention to offer the first truly free Internet service starting in the UK," Emanuel told Reuters. "We will evaluate it and see if we can roll it out to other parts
of Europe."

Advertising and e-commerce revenues are expected to power the venture.

The company launched a similar dial-up service in North America, Free Access, which now has 2 million users and is adding about 10,000 more each day, he said.
Free Access is entirely free, but users see a built-in advertising window when viewing Web pages.

AltaVista will initially limit its UK service to "several hundred thousand" users to test demand, Emanuel said.

AltaVista, which had 54 million users worldwide as of January, recently rolled out services in Sweden, Germany, France and the Netherlands and plans to roll out
service in Italy and Spain very soon, he said.

Emanuel noted that the UK has far fewer Internet users than in the United States, in part, he said, because of the telephone toll charges. "This is an opportunity to
really boost the users in the UK and the rest of Europe," he said.

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BT<BT.L> says no threat seen from AltaVista plan


LONDON, March 6 (Reuters) - British Telecommunications Plc <BT.L> said on Monday it was not threatened by news that online search engine AltaVista Co.
was set to offer free UK access to the Internet without telephone charges, after a one-off fee.

"Obviously we need to look at the announcement," a BT spokesman told Reuters, after AltaVista, primarily owned by venture capital firm CMGI Inc <CMGI.O>,
said it would charge a one-off fee of about 30 pounds for the service.

"Can they sustain it?" the spokesman said, adding: "The devil`s in the small print."

BT said its own ISP (Internet service provider) had introduced 0800 (free) access at weekends and evenings for a monthly fee of 9.90 pounds.

"We haven`t been sitting idle," the spokesman said. "Our range of unmetered call packages, called Surftime -- which any ISP can sign up to -- is awaiting Oftel
approval."

BT said it was focusing on the fast growing business-to-business market and not, like AltaVista, just the consumer market.

"All our products are quality," the BT spokesman said.

AltaVista, which had 54 million users worldwide as of January, will initially limit its UK service to several hundred thousand users to test demand.

Advertising and e-commerce revenues are expected to power the venture.

David Emanuel, an AltaVista spokesman, noted that the UK has far fewer Internet users than the United States, in part, he said, because of telephone charges.

"It is our intention to offer the first truly Internet service starting in the UK," he told Reuters.

The company launched a similar dial-up service in North America, Free Access, which now had two million users and was adding about 10,000 more each day, he
said. Britain`s largest Internet service provider Freeserve Plc <FRE.L> was not immediately available for comment.

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Blair hails AltaVista, seeks end to digital divide


By Edna Fernandes

LONDON, March 6 (Reuters) - Prime Minister Tony Blair weighed into the debate on Internet prices on Monday by welcoming U.S. giant
AltaVista`s cheap, flat-rate access in Britain and calling for more of the same.

Blair hailed the move as "good for business and consumers", ahead of a keynote speech on Tuesday which will demand an end to the "digital
divide" on the Net.

Blair`s official spokesman said he will call for wider and cheaper Internet access at a conference on the new knowledge-driven economy, which will
also be attended by Trade and Industry Secretary Stephen Byers and the unions.

Pointing to AltaVista`s announcement of unlimited access for under 50 pounds ($79), Blair`s spokesman said:

"He certainly sees the AltaVista deal as good news for business and consumers," adding that the premier wanted to see companies bridge the
cyberspace divide.

FOR THE MANY, NOT THE FEW

"His speech tomorrow will say the knowledge economy cannot become the preserve of the elite," said the spokesman.

Another spokesman told Reuters Blair will suggest ways of bridging the divide at the industry conference on Tuesday.

"It`s about widening access and cutting costs," he said. "The government welcomes competition wherever it comes from."

Evidence of the gap between the Net literate and illiterate will be published in a government report on Tuesday showing 45 percent of web users
are in the 15-24 age group, with 48 percent in the top A/B socio-economic groups.

That government-commissioned report was put together by independent consultants Booz Allen Hamilton.

Blair has sought to lead by example by taking computer lessons to learn to surf the Web and making a weekly broadcast over the Net.

UK COURTS E-COMMERCE

Cutting the high cost of Net access has become a key priority for Blair`s government which wants to turn Britain into the European leader in
electronic commerce.

Blair has promised an e-commerce friendly regime and Tuesday`s report will show that Britain`s e-commerce is four times the European average
but still lagging behind the advanced United Staes market.

In a bid to emulate the U.S. success story, Chancellor of the Exchequer Gordon Brown last month called for cheaper access, clashing with
telecoms giant British Telecommunications <BT.L>. Brown`s remarks angered BT and rocked its share price.

Brown pledged to slash the cost of Internet access, saying it could be done by getting BT`s regulator to end early the company`s local monopoly
linking houses to telephone network loops.

($1=.6340 Pound)

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Freeserve<FRE.L> shares fall on Altavista threat


LONDON, March 6 (Reuters) - Shares in Internet service provider Freeserve Plc fell 9.3 percent to 835 pence by 0910 GMT on Monday
following an announcement by online search engine AltaVista Co that it plans to offer free, unmetered Net access in the UK.

Altavista plans to offer free access to the Internet without telephone charges after a small, one-time fee of about 30 pounds.

Freeserve, which offers a subscription-free service but takes a share of telephone charges, said: "We welcome anything that reduces the cost of
Internet access...we are also working to construct our own low-cost packages."

AltaVista is primarily owned by venture capital firm CMGI Inc <CMGI.O>. Advertising and e-commerce revenues are expected to power its
unmetered free service venture in the UK.

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OCUS-AltaVista to cut price of Web access in UK


(Adds Oftel comment, para 3-4, AOL UK comment, para 14-15) By Richard Baum

LONDON, March 6 (Reuters) - U.S. Internet company AltaVista on Monday promised Britons unlimited Web access for an upfront fee of no
more than 50 pounds ($79.06), accelerating moves to get more people online by abolishing metered calls.

AltaVista said it will connect people to the Internet via a freephone number for a joining fee of 30 to 50 pounds and an annual renewal charge of 10
to 20 pounds. Telecommunications watchdog Oftel said the move, which throws down the gauntlet to Internet service providers who charge higher
subscriptions or rely on a cut of metered phone calls, was "excellent" news for consumers.

"It shows competition is working," said Anne Lambert, Oftel`s director of operations.

Altavista will launch the service within a few months but limit it to 500,000 subscribers in the first six months to ensure it can cope with demand, a
spokeswoman said.

The package appeared to set a new benchmark for cheap Web access in the UK, which the government says lags the United States for Internet
use because people must pay phone charges for every minute online.

"The idea is to kickstart the industry in the UK," an AltaVista spokeswoman said.

AltaVista is not the first to offer "all-you-can-eat" access but unlike some of its predecessors it has great experience in scaling up services, said
Nick Jones, analyst at Internet advisory group Jupiter.

Cable TV company Telewest Plc <TWT.L> suffered a series of service failures because of heavy demand when it launched its unmetered package
last month. A stream of smaller ventures have suffered similar problems.

Jones said the decision to limit the number of subscribers gave AltaVista credibility.

"If you weren`t to limit it, it would smell," he said.

CHALLENGE TO FREESERVE

AltaVista`s move challenges Britain`s leading Internet service provider (ISP) Freeserve Plc <FRE.L>, whose users pay no upfront fees but face
phone charges of up to four pence a minute for daytime access. Shares in Freeserve fell four percent by midday.

Freeserve said it welcomed anything that cut the cost of Internet access and that it was working on its own low cost packages.

AOL UK -- a joint venture between America Online <AOL.N> and Bertelsmann <BTGGga.F> -- also voiced its support for unmetered Web
access and said it was studying the Altavista move.

"It`s an interesting business model and one we will be watching closely," an AOL UK spokesman said.

The charging model pioneered by Freeserve has encouraged millions of people on to the Web, but analysts say the shock of big phone bills has
deterred users from surfing for long.

A Freeserve user spends about six hours a month on line compared with about 30 hours in the U.S.

British Telecommunications Plc <BT.L> has promised to launch unmetered access in the spring, but its plans have been delayed by a dispute with
the regulator and other ISPs.

AltaVista, which is primarily owned by venture capital firm CMGI Inc. <CMGI.O>, said it would make money from advertising and e-commerce
as well as the subscription charges. It would not name its telecoms provider, but said it was not BT.

The company has a similar dial-up service in North America, called Free Access, which has two million users and is adding about 10,000 a day,
said David Emanuel, an AltaVista spokesman in the U.S.

Unlike Free Access, UK users won`t be subjected to a built-in advertising window when viewing Web pages, he said. Emanuel said it might extend
the service to other parts of Europe.

AltaVista, which had 54 million users of its search engines and portals worldwide as of January, recently rolled out online services in Sweden,
Germany, France and the Netherlands.

(With additional reporting by Sara Ledwith) ($1=.6324 Pound)

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FOCUS-AltaVista to cut price of Web access in UK


(Adds reaction from Blair in paras 2 and 11, BT in para 16) By Richard Baum

LONDON, March 6 (Reuters) - U.S. Internet company AltaVista on Monday promised Britons unlimited Web access for an upfront fee of no
more than 50 pounds ($79.06), accelerating moves to get more people online by abolishing metered calls.

The move was welcomed by Prime Minister Tony Blair, whose government has clashed with dominant operator British Telecommunications Plc
<BT.L> over the high cost of Internet access compared to the United States.

AltaVista said it will connect people to the Internet via a freephone number for a joining fee of 30 to 50 pounds and an annual renewal charge of 10
to 20 pounds.

The deal throws down the gauntlet to Internet service providers who charge higher subscriptions or rely on a cut of metered phone calls.

AltaVista said it will launch the service within three months but limit it to 500,000 subscribers in the first six months to ensure it can cope with
demand, the company said.

It is not the first to offer "all-you-can-eat" access but unlike some of its predecessors AltaVista has great experience in scaling up services, said
Nick Jones, analyst at Internet advisory group Jupiter.

LIMITED LAUNCH SENSIBLE

He said the decision to limit the number of subscribers gave AltaVista credibility. "If you weren`t to limit it, it would smell," he said.

Cable TV company Telewest Plc <TWT.L> suffered a series of service failures because of heavy demand when it launched its unmetered package
last month. A stream of smaller ventures have suffered similar problems.

AltaVista`s package appeared to set a new benchmark for cheap Web access in the UK, which the government says lags the U.S. for Internet use
because people must pay phone charges for every minute online. Technology analysts Durlacher reckon unmetered access could treble the time
UK users spend online.

"The idea is to kickstart the industry in the UK," an AltaVista spokeswoman said.

Blair said the move was "good for business and consumers". Telecommunications watchdog Oftel said it was "excellent" news. "It shows
competition is working," said Anne Lambert, Oftel`s director of operations. AltaVista`s move challenges Britain`s leading Internet service provider
(ISP) Freeserve Plc <FRE.L>, whose users pay no upfront fees but face phone charges of up to four pence a minute for daytime access. Shares in
Freeserve fell 4.8 percent by mid- afternoon.

RIVALS STUDYING MOVE

Freeserve said it welcomed anything that cut the cost of Internet access and that it was working on its own low cost packages.

AOL UK -- a joint venture between America Online <AOL.N> and Bertelsmann <BTGGga.F> -- also voiced its support for unmetered Web
access and said it was studying the AltaVista move.

"It`s an interesting business model and one we will be watching closely," an AOL UK spokesman said.

BT said it would be looking for firmer details of the package. It has promised to launch unmetered access in the spring, but its plans have been
delayed by a dispute with Oftel and other ISPs.

The charging model pioneered by Freeserve has encouraged millions of people on to the Web, but analysts say the shock of big phone bills has
deterred users from surfing for long.

A Freeserve user spends about six hours a month on line compared with about 30 hours in the U.S.

AltaVista, which is primarily owned by venture capital firm CMGI Inc. <CMGI.O>, said it would make money from advertising and e-commerce
as well as the subscription charges. It would not name its telecoms provider, but said it was not BT.

The company has a similar dial-up service in North America, called Free Access, which has two million users and is adding about 10,000 a day,
said David Emanuel, an AltaVista spokesman in the U.S.

Unlike Free Access, UK users won`t be subjected to a built-in advertising window when viewing Web pages, he said. Emanuel said it might extend
the service to other parts of Europe.

AltaVista, which had 54 million users of its search engines and portals worldwide as of January, recently rolled out online services in Sweden,
Germany, France and the Netherlands.

(With additional reporting by Sara Ledwith) ($1=.6324 Pound)

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ANALYSIS-AltaVista`s sights high in UK brand-build


By Sara Ledwith, European Technology Correspondent

LONDON, March 6 (Reuters) - A plan by U.S. Internet company AltaVista to offer unmetered Web access in Britain is sure to grab headlines -- and likely to lose
money -- in a much-needed brand-building exercise for the site in Europe.

Enthusiasm for AltaVista`s plan to sell unlimited access for an upfront fee came from the highest level, including Britain`s Prime Minister Tony Blair, as it promised to
turn off the meters and end a key restraint on Europeans` Internet surfing habits.

Analysts have long said that a vital next step in Europe`s Internet evolution should be to stimulate e-commerce and online advertising revenues by encouraging
consumers to stay online as long as they want, as they can in the United States.

So for politicians, AltaVista`s announcement was a welcome gauntlet to throw at former telecoms monopolies like British Telecommunications Plc <BT.L>, which
still charge by the minute.

But coming from AltaVista, which despite being a well-known name among existing Internet users has a relatively weak presence in European households, analysts
found that the move presented more questions than answers.

"It`s pretty safe to bet that this is a marketing-led ploy because they were late to the UK market," said Noah Wasskin, analyst at Internet advisory group Jupiter.

"They`re going to lose money -- there`s absolutely no question -- unless they have a miracle telco partner," he said.

ALTAVISTA NOT TOP OF ADVERTISERS` LISTS

AltaVista -- which so far has not offered Internet access but instead aims to attract surfers once they are online through the appeal of its high-powered
search-driven site -- is making a late drive into a relatively mature British access market.

While Internet service providers like Freeserve <FRE.L> and America Online <AOL.N> aim to keep surfers returning to their sites by being the ones to open the
Internet door, sites like AltaVista have to grab attention after surfers are logged on.

Like Yahoo Inc <YHOO.O>, AltaVista makes money on advertising and e-commerce generated by visitors to its sites, and said on Monday this is how it would
fund its latest venture. But according to data from audience measurement group MMXI, AltaVista, primarily owned by venture capital firm CMGI <CMGI.O>,
would for now stand quite far back in the queue when it comes to bidding for advertising dollars.

In January, it ranked 15th among UK portals with just 12.4 percent of UK-based surfers visiting its dot-com site once in the month, and a total of 967,000 unique
visitors.

Top player Freeserve had 2.5 million unique visitors and its site was visited at least once by 32.3 percent of surfers.

The media attention generated by a Prime Ministerial endorsement of the unmetered access plan may well help boost that rating, but analysts looking at the
nuts-and-bolts of the plan said AltaVista faces serious challenges.

Chris Tant, analyst at Datamonitor, noted that the timing of the launch is unclear -- AltaVista said it would come "in the next three months" -- leaving it open in the
meantime to flanking manoeuvres from aggressive rivals.

AltaVista said a maximum of 500,000 users would be able to use its unmetered access service in the first six months, which Tant noted could give it nine months to
generate half a million subscribers.

That means it would then be only a quarter the size of Freeserve, and be showing a slower growth rate than did the subsidiary of electronic goods retailer Dixons
<DXNS.L> when it broke the mould with subscription-free access.

Distribution of the software to get new Internet users to take up the surfing habit is another area where AltaVista looks weak, he added: "They are certainly going to
need to get CD-Roms out to a lot of people."

"To be honest I don`t consider (AltaVista) to have that strong a brand name," Tant said. "There were probably an awful lot of people this morning saying `Who are
they?`"

PROFIT IS STARTING TO COUNT TOO

While profit is typically the last thing to concern anyone involved in an Internet project, analysts are sceptical about AltaVista`s chances of delivering its promise to
cover the telecoms costs it will carry through e-commerce and adverts.

"You need an extremely good portal with a very large audience," said Tant, noting that so far AltaVista has not gone very far down the advertising route.

Datamonitor`s research has found existing Internet service providers expect to generate 26 percent of their revenue on e-commerce and 25 percent on advertising,
Tant said. "That is going to be tough for most of them."

For a company like AltaVista to be able to cover the extra telecoms costs it is paying by offering unlimited access, it would need to earn a much higher percentage
in advertising and e-commerce revenue than other portals.

"They need to have a very strong relationship with their telco otherwise they are just haemorrhaging money as people go online," he said. "They`ve got serious
competition."

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FOCUS-NTL offers free, unlimited UK Web access


(Adds comment from analyst and AOL UK, updates share prices) By Paul Bolding and Ben Hirschler

LONDON, March 7 (Reuters) - Cable group NTL Inc <NTLI.O> ramped up the competition in Britain`s Internet market on Tuesday with plans to
launch an unmetered, unlimited access service.

Shares in Freeserve Plc <FRE.L>, the UK`s established Internet leader, tumbled 13 percent on concerns that unlimited access would blow a hole in
its business model, based on taking a cut of phone charges.

Nasdaq-listed NTL said "ntlworld" would start on April 17 for Net access via personal computers, with a TV Internet service coming soon after.

The announcement came one day after search engine Altavista promised Britons unlimited access for an upfront fee of no more that 50 pounds ($79)
and underlines accelerating moves to get more people online by abolishing metered calls.

"We are comfortable that our service is going to be a winner," said NTL Chief Executive Barclay Knapp on BBC radio.

"There was a lot of talk that the telecommunications business was holding back the Internet and our announcement today proves that that is just not
true. We can economically provide this service on a free basis to the British consumer."

Homes in areas cabled by NTL will get access as part of a package of phone and TV services that starts at 9.25 pounds per month.

Other users with British Telecommunications Plc <BT.L> phones will pay a one-off charge of 10 pounds for a line adapter and would be required to
spend at least 10 pounds a month on voice calls via NTL.

NTL`s acquisition of Cable and Wireless Communications Plc <CWZ.L> is pending government approval and NTL said CWC customers would be
covered by the offer if the takeover goes through.

"A DEEP POCKETS GAME"

The moves by NTL and AltaVista, which is primarily owned by venture capital firm CMGI Inc. <CMGI.O>, were welcomed by the government.
Prime Minister Tony Blair was due to stress the need to bring Britain online in a speech later on Tuesday.

The offerings from NTL and AltaVista set a new benchmark for cheap Web access in the UK, which the government says lags the U.S. for Internet
use because people must pay phone charges for every minute online. Technology analysts at Durlacher reckon unmetered access could treble the time
UK users spend online.

But the plans are likely to spark a price war among Internet service providers, spelling pain for established players. Freeserve`s stock fell 13.4
percent to 762 pence by 1000 GMT, extending a loss of five percent on Monday in reaction to the Altavista move.

"It`s going to be a deep pockets game," said Miles Saltiel, technology analyst at WestLB Panmure. "Freeserve have probably got 70-75 million
pounds left in their warchest. They are going to have to increase their rate of spend, which has been 10-15 million a quarter, in order to match the free
service deals that are now emerging."

The charging model pioneered by Freeserve has encouraged millions of people on to the Web, but analysts say the shock of big phone bills has
deterred users from surfing for long.

An average Freeserve user spends about six hours a month on line compared with about 30 hours in the U.S.

Other Internet service providers, such as AOL UK, charge a subscription.

AOL UK, the America Online <AOL.N> and Bertelsmann <BTGGga.F> joint venture, said there was room for several models addressing the
needs of value-oriented and premium customers.

Freeserve and AOL UK both said they welcomed moves to cut costs for consumers but added that BT`s failure to offer unmetered local calls
remained a major hurdle.

"We haven`t yet got from BT true unmetered access at the root level in this country...BT are still making money on a per minute basis using a charging
system we know consumers no longer want," said AOL UK spokesman Matt Peacock.

Shares in BT fell 2.5 percent to 12.56 pounds and analysts said pressure was mounting on it to cut charges.

"I don`t think this is the end of the world for BT but they will have to develop mechanisms to deal with it," said ABN AMRO telecoms analyst Jim
Ross.

"If anyone can afford to offer free Internet access it`s BT. It would not be great news for their margins if they did so but it would be a way of
protecting their market position." ($1=.6358 Pound)

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FOCUS-BT<BT.L> fights back in Internet price war


(Add details of ISP charges, reaction from ISPs, restates prices excluding line rental)

By Richard Baum

LONDON, March 8 (Reuters) - British Telecommunications Plc on Wednesday returned fire in the Internet price war with plans to cut charges to
below U.S. levels, but it was unclear how much customers would pay for its new services.

Responding to government pressure and cheap deals from rivals, BT announced a new 0844 service that from June would provide unlimited surfing
for as little as 19.99 pounds a month or cheap per-minute use with no upfront fee.

Customers may have to pay additional charges to their Internet service provider (ISP) on top of the monthly BT rate, but the company said it
expected some would not charge and may even give cash credits to lure "eyeballs" to their electronic commerce.

The announcement was less spectacular than this week`s headline-grabbing deals from U.S. Internet company AltaVista <CMGI.O> and cable group
NTL Inc <NTLI.O>, but BT said its packages were competitive when the cost of line rental and other "hidden charges" were included in the rival
offerings.

BT has cut the price for its unlimited SurfTime deal to 19.99 pounds from the 34.99 pounds it announced in December, before the proposal got
caught up in a dispute with other ISPs and industry regulator Oftel.

PRICES COMPARABLE TO U.S.

Addressing government criticism over the relatively high costs of Internet access in the UK, BT said its "all-you-can-eat" price was comparable to
that charged in the United States.

A round-the-clock deal for businesses, priced at 29.74 pounds a month, was significantly cheaper than in the U.S., BT added.

By comparison, NTL is offering free access for its telephone customers and AltaVista is planning to provide unmetered surfing for a one-off fee of up
to 50 pounds plus an annual renewal charge of up to 20 pounds.

BT shares were up 3.9 percent following the announcement, also helped by news of a 2.5 billion pound police radio contract. Shares in Britain`s
leading ISP, Freeserve Plc, <FRE.L>, which lost a fifth of their value on Tuesday following NTL`s announcement, were up 2.2 percent.

But analyst John Tysoe at West LB Panmure said he was unimpressed by BT`s offers, warning it risked losing its high-spending Internet customers in
the same way as U.S. giant AT&T Corp <T.N>.

BT also announced packages for unmetered evening and weekend use, priced at 5.99 pounds a month. Daytime dial-up will cost a penny a minute.
BT said U.S. customers would typically pay around five pounds a month more for such a service.

It also reduced the cost of metered access -- charging users per minute online -- to a penny per minute during the day, 0.6p in the evening and 0.5p
at the weekend, with no additional monthly charges.

All the deals, which BT said it wants to start on 40 percent of exchanges from June 1 and 100 percent by the end of October, exclude any extra
charges by ISPs.

TALKING TO FREESERVE

BT executives said they were talking to many ISPs including Freeserve with a view to announcing the first 0844 service within a month.

But ISPs will not get a share of BT`s call revenue under the new packages, called SurfTime, meaning they will have to find other ways of making
money.

Freeserve, which currently sends its traffic over Energis Plc <EGS.L> lines, has already said it plans to shift its business model from revenue sharing
to e-commerce. A Freeserve spokesman said it would see how SurfTime could fit with its plans for a low-cost unmetered service.

The deal could allow BT to win back some of the Internet traffic carried by competitors such as Energis, although industry regulator Oftel said BT will
have to provide a wholesale package that will allow rivals to offer 0844 numbers.

The packages have yet to be cleared by Oftel, which has held up approval of the company`s unmetered Internet plans because it believed they were
anti-competitive.

Steve Rawlinson of ClaraNET UK, one of the ISPs disputing BT`s unmetered access plans, said the new package was a step forward. But he said
ClaraNET would want to see what 0844 deals other telecoms companies offered before deciding if it would sign up with BT.

The rush to cut Internet prices in the UK follows a public spat between the government and BT over the cost of surfing.

Prime Minister Tony Blair kept up the pressure on Tuesday, telling the industry to cut prices to U.S. levels and get every Briton online by 2005.