Flat-rate AOL survives in UK

AOL insisted on Wednesday that it has no plans to stop offering an unmetered dial-up internet product in the UK, despite ending an offer that allowed some German customers to have a flat-rate 56Kbps service.

AOL had been operating a lottery-style system in Germany, where one thousand customers each week won the right to get an "all you can eat" narrowband internet access product for 19.90 Euros (around £13.60) per month.

AOL has now closed this scheme. But the UK is safe from similar moves, thanks to a wholesale access product that UK ISPs pushed for and won some years ago.

"AOL UK is driving the take-up of narrowband Internet access in the UK with its AOL Flat Rate offering at £15.99 per month. We are still seeing strong growth in narrowband and have no plans to discontinue this service," an AOL spokeswoman said.

The difference between Britain and Germany, AOL explained, is that while in the UK BT must provide a wholesale unmetered narrowband internet access product - FRIACO - there is no such compulsion on Deutsche Telekom.

AOL launched the lottery in an attempt to prove that there is solid demand in Germany for a FRIACO-type product - and after attracting interest from 600,000 consumers it believes it has proved its case.

"We've been putting pressure on the government and Deutsche Telekom in an attempt to get a FRIACO-type product, and the large number of people who registered for the lottery shows that people want flat-rate narrowband Internet access," an AOL Europe spokesman said.

The absence of a FRIACO-like product means that AOL is currently charging the winners of its lottery the fixed 19.90 euro monthly fee, but having to pay Deutsche Telekom for every minute they are online.

The UK suffered the same problem before FRIACO was available, with some ISPs launching unmetered access products and then having to pull them, because their customers were online so much that ISPs were paying more to BT than they were receiving from their customers.

"We'd like to give customers a flat-rate product, but at the moment we've got to pay Deutsche Telekom for every minute they are online," the AOL Europe spokesman explained.

It is understood that German surfers who were lucky enough to win AOL's lottery will continue to receive an unmetered internet access service.

Graeme Wearden writes for ZDNet UK