Since the CarPhoneWarehouse launched its "free" broadband offer (Channel4) a couple of weeks ago - and rather entertainingly saw its own website and support infrastructure fall over (Independent) due to huge popular interest - I've been wondering what it means.
Some commentators (CommentisFree) are looking at it as a more-or-less seismic shift akin to Metro giving away newspapers or Loot giving away classified space. For me, this is a less glorious stage in the evolution of the broadband market. Connectivity is a commodity, and like any commodity the cost to the end user should in theory fall to pretty much the cost to the provider of providing it. The ongoing process of local loop unbundling and the two-decades-overdue ending of BT's monopoly over the last mile of wire now makes this possible. The roll out of wifi, especially municipal wifi (MSNBC) such as the telecos are desperately trying to legislate against in many US cities, makes it quicker.
CarPhoneWareHouse bundling "free" broadband with the landline telephony it renders obsolete is therefore a rather neat attempt to stem that commodification tide. Compete directly on price and you're into a genuinely free market in which the consumer will end up with a broadband connection for almost nothing and do away with his needless landline. Compete indirectly by calling it a free benefit of a related service...well, there's still plenty of margin for everyone in that approach. Sky may bundle "free" broadband with their TV packages next. Virgin as we know plan to bundle it with home phones, mobile and anything else they can roll up together. What I don't expect to see any time soon is anyone who currently has a stake in telephony or ISP revenues actually costing out a broadband service, on its own, at a genuinely competitive price point.
