Amtrak's Internet By Rail

NRoute Communications, a startup satellite-based Internet and TV provider, is launching a free service next month on the Northeast Corridor.

by Jim Wagner of internetnews.com [September 13, 2002]

Select Amtrak lines in Philadelphia and New York are getting ready to test a quasi-free, quasi-broadband Internet service next month, officials said this week.

The Keystone commuter line passing through Harrisburg, Penn., Philadelphia and New York will try out the new service provided by start-up NRoute Communications, giving passengers limited access to e-mail, some online shopping and "transactional" Web sites (shopping channels), with a charge for full Internet access and pay-per-view feature films.

Officials aren't sure what the pricing on pay-for-view and Internet access will be, because they are concentrating on the free cable TV-like services tailored for raveling business people—news, weather and sports. The bulk of revenues, they said, would come from advertisers who sign up with NRoute.

Where have we heard this before?

Free Internet service, with advertising revenue subsidizing customers' access fees, are a thing of the past shrouded in financial failure. It first started with dial up Internet service providers like Spinway and ZipLink and evolved into broadband with FreeDSL.

The only two national providers offering free connectivity (eight hours a month) are Juno and NetZero, which are now a merged company called United Online, and rely heavily on its premium subscribers to pay for the free service.

Alan Mosher, senior research director of consumer, SOHO and Internet services at Probe Research, said he's real leery of any business model that involves advertising as its basis.

"I've just been looking at AOL's and Yahoo!'s quarterly numbers, and looking at how Yahoo! is trying to diversify its revenue stream away from advertising," he said. "About the only real hope I could see for something like this would seem to be the regional, localized advertising that they might be able to generate.

Robert Lisowski, NRoute president, said his company has roughly a half-year to a year of funding to stay afloat if advertising remains weak in the start-up stage of its new business.

Prior to its free ISP gig, NRoute sold a similar service to the U.S. military. Its M64 servers, which feature data storage and caching keeps programming local and not entirely reliant on a satellite feed.

He feels once advertisers find out about the service, which is really more of a cable TV service than an Internet service, they'll be receptive to paying for it because the service is so unique.

"What's really appealing to advertisers is they've got somebody captive in a seat for a period of time; there's not really much else [the passenger] can do," Lisowski said with a laugh. "That's why we feel pretty strong about the advertising model."

The Amtrak test will involve a hefty front-end investment. The Associated Press reports that the Pennsylvania Department of Transportation floated a $155,000 grant to support the test service.

The ISP will provide the installation and maintenance for the equipment used in the trains, which comprise of a kiosk-like interactive touch-screen and access point (AP). The AP also acts as a hotspot for laptop users, who will be able to pay a fee to gain full access to the Internet.

Lisowski said the business model is also ideal for intercity bus routes and airline services, and NRoute is currently in talks with several.

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