AOL nudges US dial-up subscribers toward broadband

The cost of dial-up to increase

Starting next month, America Online Inc. will increase the price of its most popular dial-up access plan in the U.S. to encourage subscribers to adopt the company's new broadband access plan.

Starting on March 9, subscribers to the AOL with Unlimited Dial-Up Plan, who now pay US$23.90 per month, will pay $2 more per month. AOL started notifying subscribers about the upcoming price increase this month.

At $25.90 per month, those subscribers will pay the same or a few dollars less than they would for the new AOL High Speed broadband plan, announced in January and available now.

AOL High Speed subscribers get the same proprietary content and services as dial-up subscribers but with a broadband connection, which enhances the online experience, especially when it comes to multimedia content.

AOL High Speed subscribers pay $25.90 per month if their access is provided by AT&T Inc., Charter Communications Inc., Verizon Communications Inc., Qwest Communications International Inc. or Time Warner Inc., and $29.90 per month if they are served by BellSouth Corp.

Although it may seem like a no-brainer for subscribers of AOL's unlimited dial-up plan to switch over to AOL High Speed, they have to factor in one-time charges involved in the transition. The price and nature of these one-time charges vary with the access provider and can include activation, shipping, hardware and installation fees. Some AOL High Speed plans also include a 1-year commitment requirement, and cancellation fees apply if the subscriber exits early. AOL High Speed plans are currently available to a majority of AOL subscribers in the U.S., but not all.

AOL has been steadily losing subscribers in the U.S. in recent years as people graduated from dial-up to broadband access. AOL used to offer subscription packages bundled with broadband access but stopped that more than a year ago, AOL spokeswoman Anne Bentley said. Those plans were pricey, beginning at $44.95 per month. The company now is pricing its broadband packages more competitively.

AOL, a Time Warner unit, hopes that AOL High Speed will help it retain its subscribers and attract new ones. AOL now has about 19.5 million subscribers in the U.S., and the majority are on the $23.90-per-month unlimited dial-up plan, Bentley said.

There are also less expensive dial-up plans with a limited amount of connection time per month. AOL also offers a $14.95-per-month plan that includes its proprietary content and services but no bundled Internet access of any sort. Those subscribers have to get the Internet access by themselves, although AOL partners with some access providers to offer special access prices on that plan.

Copyright © 2006 IDG Communications, Inc.

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