Competition's demise spurs AOL price hike


June 3, 2001


Just a few years ago, the growing number of free Internet access providers had some analysts wondering aloud if fee-based Internet providers -- like America Online and Earthlink -- were going to survive the storm.

Fortunately for the fee-based Internet providers, the free Internet trend, while popular with consumers, didn't hold up as a profitable business model.

Since the all virtually depended on advertising to pay for access, the downturn in Internet advertising pushed most of them into bankruptcy or forced them to begin charging for the Internet access they provide.

One of the first free providers, Juno, is left standing in the field while it too searches for a way to make money.

On the heels of the failure of the "free Internet" movement, America Online recently raised the price for access to its service by nine percent to $23.90 for unlimited dial-up access. The new price begins with the July billing cycle.

With the free services no longer a threat, AOL has the power to raise the price its 30 million subscribers pay each month. The move is expected to boost subscriber revenues by $200 million this year and by $430 million next year.

Juno actually led the pack in the rate hikes; it raised the price it charges for its premium service from $9.95 to $14.95 earlier this year.

Another freebie innovator, NetZero, offers a premium dial-up Internet access plan for $9.95 as well.

Both Juno and NetZero offer free Internet access, but both have cut back on the number of hours users get to spend online.

WAL-MART.COM. Speaking of dial-up Internet access, the nation's No. 1 retailer, Wal-Mart, will roll out its own branded Internet access service, pricing unlimited access for $9.95 a month.

The plan for the service, to be called Wal-Mart Connect, has been in the works for some time.

Wal-Mart signed an alliance with AOL in 1999, and had planned at first to rollout its branded Internet access more than a year ago. The Wal-Mart service is a branded version of the CompuServe Internet access service, which is owned by AOL.

As a tie-in to bring in new revenue, Wal-Mart plans to merge its clicks with Wal-Mart bricks. Customers will be able to go online to do things like refill prescriptions they can pick up at their local Wal-Mart store.

For more details, visit

DSL VS. CABLE. High-speed Internet access is a service still out of reach of many Internet users -- either by price or by physical location.

Statistics show that the majority of broadband users in North America access the Internet through a cable TV provider.

Seventy percent of broadband users use cable; the rest use DSL.

The next price war among Internet providers may be between DSL and cable Internet providers as each tries to gain market share over the other.

In areas with both services, it will be interesting to see how the services stack up over the long haul.

One analyst predicts that DSL will see significant growth in the near future as the technology and the Baby Bells go through a few growing pains.

In my mind, the winner will be whichever business can presents a service with good value and customer service -- just like any other successful business venture.

HOAX HITS. A hoax warning distributed via e-mail about a virus called Sulfnbk.exe reportedly has created considerable concern.

The warning, which reportedly had its origins in Brazil, has prompted concerned computer users to delete files from their computer hard drives.

The warning prompted users to look for the file on their computers; if the file was there it was infected, and they were instructed to delete it.

The infected file was "timed" to activate on June 1. In reality, the file is a little-used Microsoft Windows utility, and deleting it did no real harm to the operating system's ability to function.

The deleted file can be restored from a users original Windows disk if necessary.

The warning was so ominous that I found myself going to check if the warning was legitimate.

Users who deleted the file can restore it by following instructions found at the Symantec Web site. Windows 98 users can simply run the System File Checker.

For more information, visit

REAL VIRUS ALERT. An e-mail promising nude photographs of Jennifer Lopez is actually bait designed to trick people into opening a virus attachment -- W95.CIH, also known as the Chernobyl virus.

The Chernobyl virus is more destructive than other viruses that have been active recently. It tries to destroy Windows executable files, and is said to attack a computer's Flash BIOS, which could prevent a computer from booting up.

The virus arrives as an e-mail with the subject, "Where are you." The message is "This is my pic in the beach" and the attachment which delivers the payload is JENNIFERLOPEZ_NAKED.JPG.VBS.

The best defense against viruses sent as e-mail attachments is to treat each one with extreme caution; delete any that you suspect might be viruses, or weren't expecting from someone.

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