The free ISP model and Spinway, Inc

Since 1996, several major free ISP services have been founded in the US and elsewhere, including Spinway, Inc. Spinway's services were offered primarily through, and under the name of, large consumer companies such as Yahoo!, KMart, Costco, Spiegel, Barnes & Noble, Ace Hardware, and NBC among others. By early 2001, the free ISP market had been reduced severely, primarily due to the lack of revenues associated with such “free” services. Spinway, founded in 1998, was a major, and perhaps the largest, free ISP in the US with over 6 million customers at its peak. Spinway folded in December of 2000, and the remains of their services were taken over by KMart's BlueLight.com. In November of 2002, BlueLight.com was sold to United Online and the ISP services available through BlueLight.com are no longer free. This teaching case discusses the viability of free digital infrastructures, such as Internet Service Providers (ISP). We seek to highlight and learn from the general issues experienced at Spinway and at other ISPs and Internet companies of the time.