No avast free doesn't block internet access (or IE 10), it isn't a firewall, so there is some other interaction going on and the most common cause is your firewall blocking avast.
What is your firewall ?
Does it allow avastSvc.exe internet access ?
- If it does delete the entry for it and reconnect to the internet, this should force the firewall to ask permission again.
Does it work for any other browser ?
I try to avoid using IE, but I have just tried IE10 on my other win7 netbook and no problem connecting.