With ads .... radio, television, wi-fi, telephone?
Those ingenious chaps at Fon (free wi-fi) have been messing around with an ad-supported service - and I don't mean the dull Google Ads variety. When you connect to a 'Fonera' (ie a Fon hotspot), you'll have to watch an ad to continue surfing - one every 30 minutes, according to Martin Varsavsky's blog.
Any reason why the same business model can't be applied to ordinary ISP, IM or (mobile) telephone service? Not really - apart from market appetite.