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Friday, November 6, 1998 Published at 18:42 GMT


AOL and Demon battle for Net supremacy

The ad that has led to an argument disputing a contest

By Internet Correspondent Chris Nuttall

Demon Internet is complaining to the Advertising Standards Authority over a campaign by its biggest rival AOL UK claiming the Number One spot for providing Internet access.

The row is a sign of the competition pressures building among Internet Service Providers (ISPs) as more companies, some with no Internet background, enter the market.

The Tesco supermarket chain has begun trying to undercut established providers such as AOL and Demon, and the Dixons electronics group is even offering a free service.

Ad irks Demon

AOL UK announced it had signed up its 500,000th subscriber this week by taking out full page ads in national newspapers.

They read in large headlines: "NO ARGUMENT. NO DISPUTE. NO CONTEST. NO.1" adding that the half-million milestone made AOL "the largest Internet online service provider in the UK. No question."

The text was seen as a sideways swipe at Demon's claim to be the Number One ISP with 250,000 members.

Can an OSP be an ISP?

As well as raising the matter with the ASA, Demon's legal department also complained to the BBC over a News Online story which described AOL as an ISP.

Demon argues that AOL is not an ISP but an OSP (Online Service Provider).

"The definition of AOL as an Internet Service Provider is a misrepresentation of what the company constitutes," it said in a statement.

"AOL is widely recognised as an Online Service Provider - a term accepted and used by the Internet industry to differentiate between companies that provide access to bespoke aggregated content (eg AOL, Compuserve) and those that provide access to the entirety of the Internet (ie Internet Service Providers such as Demon Internet).

"Demon Internet, with 250,000 subscribers, holds the position of the UK's number one Internet Service Provider."

But on Friday AOL UK was standing by its ad campaign:

"It is indisputable that AOL is both an ISP and an OSP and can refer to itself as either or both. Its members benefit from both proprietary online services and Internet services," said the company's legal counsel Clare Gilbert.

"The fact that AOL also provides added value services to its members through its other online services does not mean that it is not an ISP and does not mean that Demon is a player in a different market. This market is generically labelled by both press and public as the ISP industry'."

Demon Internet was founded in 1992 and became one of the first ISPs in the UK. AOL UK was launched in March 1996 after the success of America Online in the United States.

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