textfiles/politics/prodigy

                      Prodigy: Where Is It Going?

           National Rollout And User Protest Raise Questions
                About The Future OfOnline Communications

                             By Adam Gaffin

The story is bizarre but true, Herb Rothman swears. Prodigy, the
IBM-Sears joint venture, wouldn't let somebody post a message in a
coin-collecting forum that he was looking for a particular Roosevelt
dime for his collection. Curious, the man called ``member services.''
The representative told him the message violated a Prodigy rule against
mentioning another user in a public message.  ``What user?'' the man
asked. ``Roosevelt Dime,'' the rep replied.  ``That's not a person!''
the man said. ``Yes he is, he's a halfback for the Chicago Bears!'' the
rep shot back.

        Rothman, a New Yorker who was one of the first to sign up for
Prodigy when it was introduced in 1988, was one of the first to get
kicked off this past fall as an organizer of a protest against new email
charges that began January 1. Prodigy households now have to pay 25
cents for every message they send over a monthly free quota of 30.

        Leaders of the Cooperative Defense Committee--the first
nationwide protest organized largely online--have focused on issues of
censorship and alleged bait-and-switch advertising: even after Prodigy
announced the new charges, it continued to advertise as a flat-rate
service. The Texas state Attorney General's office began an
investigation in November to determine whether the ads were deceptive.
(At presstime Prodigy, while admitting no wrongdoing, had agreed to
refund charges to Texas subscribers who signed up between September 6
and December 7 of last year, reimburse the state of Texas for
investigative costs, and allow Texas users who had signed up during the
period in question to cancel their accounts for full refunds.)

Prodigy: A Different Vision

But the protest has also focused attention on Prodigy's vision of online
communications, which is far different from that seen by other national
online services, let alone local bulletin-board systems.

        It's a vision of online communications as computer home-
shopping network.

        Where others see a new way for people to communicate and even
create "virtual communities,'' Prodigy sees vast potential profits from
people shopping through their keyboards.

        ``We are an information service,'' Prodigy spokesman Steve Hein
says. "`We are not an email service.''

        Although other national services have "malls'' and advertising,
only Prodigy puts ads on almost every screen a user sees. Advertisers
pay Prodigy between $10,000 and $20,000 to design these ads and their
user interfaces.

        In press handouts, Prodigy does not even mention its public
"bulletin boards'' as a feature, pointing instead to things such as
"news and stock quotes, home shopping and banking, airline ticketing,
stock trading and our new encyclopedia, movie guide and travel guide.''

        Prodigy says its pricing--$12.95 a month for unlimited non-email
use--is based on the premise that people will use it for shopping.
``Every time you use the service to buy a holiday gift, book an airline
ticket, pay a bill, trade a stock, send flowers or buy stamps, you are
helping to assure the continuation of a flat, unmetered fee,'' because
advertisers pay a fee for each purchase and inquiry, Prodigy said in a
recent message to users.

        ``Shopping has been growing more than the bulletin boards,''
Hein says. He was unable, however, to provide specific figures showing
how much use each function now gets.

        Hein says Prodigy decided to start charging for email because 20
percent of the users were sending 90 percent of the email messages,
costing the company millions of dollars for extra computer equipment and
workers to manage a mail flow growing 20 percent a month. When Prodigy
started, he said, officials figured households would use email like
long-distance phone calls: they would only send several messages a
month.

The Email Explosion

But much of Prodigy's unexpected email traffic is due to the way it runs
its public conferences. Unlike other services, which rely on the
maturity of users and only rarely delete public messages, Prodigy
employs several dozen "editors'' to screen every potential public
message--sometimes delaying their posting by up to 40 hours, when they
are posted at all.

        According to the Prodigy user agreement: ``Prodigy reserves the
right to review and edit any material submitted for display or placed on
the Prodigy service, excluding private electronic messages, and may
refuse to display or may remove from the service, any material that it,
in its sole discretion, believes violates this Agreement, is detrimental
to other Members or to the business interests of Prodigy, its Members or
information providers or is otherwise objectionable.''

        The agreement also forbids members from attempting to buy or
sell any products without Prodigy's prior written consent. Then it adds,
``Prodigy reserves the right, without liability, to remove and not to
display, any material at the sole discretion of Prodigy.  All material
submitted to a public postings area will be automatically deleted
according to criteria established by Prodigy.''

        Prodigy has software that scans incoming public messages for
certain objectionable words before it gets to the ``editors,'' but some
members complain this is not always perfect: for example, people with an
interest in botany claim they cannot hold a public discussion about
pussywillows.

        Just a few months after Prodigy went online, some users had
turned to email for uncensored discussions.

        In December 1989, Prodigy simply eliminated an entire
mental-health bulletin board when gays and fundamentalists got into a
heated debate. Prodigy spokesman Brian Ek compares the network to the
publisher of a family newspaper that has a right to decide what is
appropriate. Prodigy has no restricted areas, and has to be concerned
about what children might see when they log on, he says.

        So pet owners were not allowed to use the word "bitch'' in
discussions about dogs. Coin and stamp collectors could not post lists
of items they had for swapping, because Prodigy saw that as commercial
activity.

        Yet users complained that even this was done capriciously.
Rothman says that if one of his messages was rejected, he would
re-submit it a few times--and often it would eventually get in.

        In October, one member asked in the ``About Prodigy'' bulletin
board why she was not allowed to comment about the use of the phrase
``Queen Bitch'' by a character on L.A. Law.  A Prodigy official
responded that Prodigy has different standards for propriety than
television. But he said the subscriber could use asterisks. If she were
to write ``Queen B****,'' then ``adults will get the idea but the actual
words will not appear.''

        Rothman says that in late 1988, he had had enough of having his
messages about glass-object collecting rejected, so he asked Kim
Hazlerig, a Prodigy member-services employee, if there were any
alternatives. He says she suggested he set up a ``mailing list'' via
email and that he contact a Los Angeles subscriber who had written
software to send large numbers of email messages at once.

        Rothman began sending out a weekly newsletter on collectibles.
By the time he was kicked off the system, he had 1,500 readers.

        Solon Owens, a former Berkeley resident now living in Oregon,
was an active participant in Prodigy's mental-health forum, where he and
others discussed their progress in 12-step programs such as Alcoholics
Anonymous. After the conference was eliminated, he started his own
mailing list of 10 people--which eventually grew to 120.

        The number of these email lists exploded. Soon dozens of groups
were using email mailing lists, typically sent on a weekly basis.

        Hein says he is unaware of anybody at Prodigy actually promoting
email lists or telling people how to start them. For a while, however,
the coordinators of these lists were allowed to advertise them in a
public forum on the service twice a month.

        But with the new email charges, all this ended. Besides Owens'
group, a number of handicapped people had set up their own mailing
lists. Owens says he could not afford to send out messages to the 120
people now on his mailing list, so he has moved over to GEnie. ``We
cannot afford to provide free services for the handicapped anymore than
the Post Office can,'' Hein says, adding the handicapped would likely
see many of Prodigy's shopping services as a benefit worth keeping.

        Told some users feel Prodigy brought much of the email costs on
itself through censorship, Hein says there was a very small group of
users who sent out as many as 10,000 email messages a month. ``If people
hadn't been sending tens of thousands of messages a month, this wouldn't
be a problem.''

        The dissenters claim 20,000 supporting users. But Prodigy claims
that is still just a small percentage of its subscribers. Hein says the
network now has more than 400,000 households online. He acknowledges
that the figure includes people using free signup kits, but said those
people make up only a small percentage.  Prodigy, like other online
services, has never had its subscriber numbers audited.

        Not all users objected to the email charges or the way Prodigy
runs its public forums. ``If they dislike Prodigy so much, why do they
have it?'' Jan Salamone of Hull, MA asked of the protesters. Salamone
likes Prodigy so much she not only wrote them a congratulatory letter
but let the service reprint it in its member newsletter.

        Henry Niman, a University of Pittsburgh researcher who was
kicked offline, said he does like Prodigy--he even persuaded several
friends and colleagues to sign up. He said his motive in protesting the
email rates was to try to keep Prodigy a good system.

        Without naming anyone, Prodigy officials have charged that Niman
and the others are really a small band of ``hackers'' who used devious
software to flood the mailboxes of other users and advertisers with
increasingly nasty harangues. In November, it posted new regulations
forbidding the use of "automatic" mail forwarders and barring users from
contacting advertisers online except to make orders or inquire about
orders.

        Niman says he compiled a list of about 900 people interested in
the email issue by using Prodigy's own membership-list function, which
lets one search for members by city and state, and that he and others
simply collected the addresses of advertisers from their email
responses.

        Penny Hay, a Los Angeles artist whose account was terminated,
says the committee was careful to delete the names of anybody who
objected to the messages.

Impact

Whether the email protest--which has garnered considerable bad press for
Prodigy--has hurt is an open question.

        Prodigy's Brian Ek says the service continues to add thousands
of new members monthly. Gary Arlen, who writes a newsletter about online
services, calls the protest a "tempest in a teapot" and says the real
question is whether Prodigy can ever recoup the several hundred million
dollars Sears and IBM reportedly poured into it.

        But GEnie, a competing system that introduced a flat rate on
nights and weekends for several dozen services--including email--just as
Prodigy was announcing its price hike, says it has picked up several
thousand disgruntled Prodigy users and now has a "Prodigy Refugees"
forum.-

        Advertisers on Prodigy are also mixed.

        "RWe've had a very good response in spite of the boycott,"
Jeanine Sek, in charge of the Prodigy account for Hammacher Schlemmer in
Chicago, says, adding she quickly grew annoyed with protest messages
coming into the company's electronic mailbox.  Sek says she would come
in some Monday mornings and find 40 protest messages in the company's
mailbox, all of which took time to deal with.

        Sek says she agrees with Prodigy that a handful of ``hackers''
were abusing email. ``They know what they're doing, or, at least, I hope
they know what they're doing,'' she says of Prodigy.  She adds that she
has been pleased with the response the company has received in its first
year on Prodigy. "We're very happy with it,'' she said.

        Chuck Billows, comptroller for H.G. Daniels, an art and drafting
supply store in Los Angeles, agrees that answering protest messages
``has been a tremendous drain on resources'' for his company.

        But, he adds, the protest "has cost Prodigy a lot of members and
customers, and possibly us a lot of sales. ... I think Christmas
shopping on Prodigy is under what we had expected.''

        Billow says he does not see anything wrong with charging heavy
email users more, but said Prodigy botched the announcement and should
have offered a second, higher flat rate for such people, rather than
refusing all attempts at compromise.

        ``I think, at best, it wasn't properly presented to their
members,'' he says, adding that both sides quickly hardened into
absolute positions. The protesters demanded ``Unlimited email or else,''
he says, while Prodigy responded with ``Well, the hell with you; this is
our business and we can do what we want.''

        ``I think there's been a lot of time and money wasted'' by both
sides, he adds.

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Copyright 1991 by Adam Gaffin. All rights reserved.  

Adam Gaffin is a reporter for the Middlesex News in Framingham, Mass.,
where he writes about personal computing.