It's free, but it'll cost you.

Internet service providers will give you the PC gratis, but not the access

There's no such thing as a free lunch. But a free PC? Now that's [something different. Or is it? Over [the past several months, numerous Interact service providers (ISPs) have enticed customers with the lure of a free computer. The cost of computers has dropped so dramatically in recent years that ISPs are taking a chance on duplicating the cellular phone industry's practice of giving customers a free phone when they sign up for long-term service.

One of the earliest adopters was Free-PC (www.free-pc.com). The Sausalito, California-based company made a splash in February with its announcement of 10,000 free computers for consumers willing to put up with ads taking up much of their monitor's real estate. Over a million eager customers signed up in the week after the announcement to receive the first disbursement of computers in June. Here's what you would have gotten: a PC with a 333 MHz processor, 15-inch monitor, 32 MB RAM, 4 GB hard drive (of which 2 Gigs are available to the user), 56 Kbps modem, CD-ROM, floppy drive, Windows 98 and free e-mail and Internet access (the standard model that most free PC companies offer). Here's what you would have had to give: detailed demographic information about your household, including income, date of birth of all members of your household, household income, a credit card number (for security reasons) and a solemn oath to spend at least 10 hours per month using the computer for 30 months.

If you don't use the computer the required amount, you will have to return it or pay up to the $600 cost of the machine (depending on how much of your obligation you've fulfilled). Besides the revolving ads that will be crazy-glued to your desktop, you also give Free-PC the right to monitor your computer use.

"Consumers should also understand how much privacy they're giving up," advises Mark Bates, an analyst with PC Data, a Reston, Virginia-based IT research firm. Which Websites you frequent, the software loaded on your machine and which applications you use most are just some of the data that will be collected about you. Although the company promises none of this information will be given to third parties, it will be used in the aggregate to help its advertising sponsors target you as effectively as possible.

Other companies, such as DirectWeb (www.directweb.com) and Gobi are giving PCs away in much the same manner as telephone companies offer free cell phones. In return for a multi-year subscription to their Internet service, you are given a PC. With Gobi (www.gobi.com), you commit to a $29.99 start-up fee, a shipping and handling fee of $45 and a $25.99 fee per month for unlimited Internet access (for 36 months). "We try very carefully to stay away from the term `free' PC. It's basically semantics," states Gobi CEO Ganesh Ramakrishnan. Over the course of the Gobi contract you can expect to pay $1,010.63. And by subsidizing the cost of the PC, Gobi and other companies like it can appeal to people who don't have $1,000 to spend on a PC that will be obsolete in two years. Both Free-PC and Gobi will replace your old computer with a new one if you decide to retain their services after the initial contract expires.

Ramakrishnan insists that advertising will be minimal, although he admits his customers', eyeballs are the company's lifeblood, Rather than carve out desktop space for ads, Gobi solicits partnerships with companies that can provide value-added services to its customers. For instance, if Gobi were to offer investment services, it would likely partner with an investment firm such as E-Trade and receive a percentage of all transactions. "What's important to us is building a long-term relationship with our customers," says Ramakrishnan. "That's why we require them to stay on for three years so we can leverage that relationship."

Right now the only truly free PC you'll get will cost you hours of staring at advertising. And since there's already a backlog of over a million customers waiting on Free-PC, it might not be the answer. The Internet access model, however, roughly equals what you'd pay for access from an online service like America Online. For three years of unlimited AOL access at the present rate of $21.95 a month, it will cost you $790.20--and that doesn't include the PC. Just remember that whatever you decide to do, you're sure to get exactly what you pay for.