livedoor (free ISP)

» see livedoor.com as it lived, on the wayback machine

~ the obit ~

You could not dial up to livedoor with the software of your choice. The free service worked only through a web browser the company wrote and shipped itself, and that browser carried an advertising banner that was on screen the entire time you were connected. The stated logic was broadcast television: the programming is free because the advertising pays, so the connection can be free on the same terms. Nobody was hiding this. The banner was the price, displayed where a price belongs.

The service opened on 29 November 1999, a few months after the company behind it was founded that August, and the portal that eventually became one of Japan's larger media properties started life as an accessory to it. What existed of it at launch was a search form, the weather and a news column, assembled mainly so the free dial-up had somewhere to deposit you.

It was not the first company to try this. Hypernet had run nearly the same model in Japan earlier, and ZERO arrived in June 2000 selling Internet Free Access ZERO with a heavy television campaign that December. livedoor ran its own commercials with recognizable television faces, Hiromi and Uno Kanda among them, and the membership went well past the million it was aiming for. The profit never arrived.

~ the rap sheet ~

~ how free worked ~

The proprietary browser had the defect that every proprietary browser has, which is that someone has to keep writing it. Support for HTML 4.0 and later, and for the various plugins people expected, had to be built in-house. It ran on a limited set of operating systems, and each time a new version of Windows appeared the company had to catch up before its customers could get online at all. A free ISP was now also a browser vendor, in the years when browsers were the most contested software on earth.

So they gave it up, and the second business model is the more interesting one. Dial-up calls were routed over the phone lines of carriers other than NTT, and the carriers paid livedoor back a portion of the call charges those connections generated. This worked because an ISP is an ideal customer for a telephone company. Subscribers stay connected for hours on end, and every one of those hours generated an access charge the carrier could collect from NTT. Hand some of it back to the ISP and everyone involved is still ahead. The free ISP's real product was the phone call.

~ the kickback ~

From Turkey the arithmetic ran the other way around. A metered line there meant paying the phone company by the minute and then paying an ISP on top of that, so the clock was simply the expensive part of the hobby. livedoor left the same clock running and aimed the proceeds back at the subscriber, which is a stranger proposition than free internet on its own.

Both arrangements depend on the same assumption, that time connected is time billed. That assumption had maybe two more years to live.

~ what adsl did ~

Flat-rate broadband started spreading in Japan around 2001, and a business built on a share of metered call revenue has no answer to a connection that costs the same whether you use it for a minute or a month. There was nothing to take a cut of. The company applied to the Tokyo District Court for civil rehabilitation on 31 October 2002, with 35 employees on the books and 3.8 billion yen of registered capital behind it, and the ISP business along with the livedoor name went to a buyer. The brand went on to a decade of fame that had nothing to do with dial-up.

The service itself kept running for thirty-two more months. The closure was announced on 6 April 2005, and the free plans, which by then had names like Free Basic Service and Economy Access, were shut in two waves: most on 31 May 2005, the remainder on 30 June. What continued afterward was a paid tier at 500 yen a month including tax. Subscribers who wanted to keep their livedoor email address could, because the mail had moved to the company's free webmail and no longer needed the phone line that had paid for all of it.

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