| America Online (AOL), the nation’s largest Internet service provider with 29 million subscribers, announced it will raise rates $1.95 for unlimited monthly use — a 9 percent jump — from $21.95 to $23.90. The increase, AOL’s first since April 1998, will begin in July. AOL’s other pricing plans are not affected.
Although America Online does not disclose how many of its customers use unlimited service, spokeswoman Ann Brackbill said the increase would affect most subscribers. The company’s other plans include Internet access for up to three and five hours a month. AOL users account for nearly a third of all time spent online in the United States, according to Jupiter Media Metrix, a market research firm.
Dulles, Va. based AOL said the increase “will help fund continued improvements in the AOL service.” The company said those improvements include the release of new software later this year that features more personal finance, entertainment, news and sports.
The price increase comes five months after America Online acquired media and entertainment company Time Warner in one of the largest mergers of all time. The combined company has set ambitious financial goals for growth, even though the economy is slowing.
It is unclear how other Internet providers will react to AOL’s price increase. Arley Baker, a spokesman for EarthLink, which has 4.8 million subscribers and charges $19.95 a month for dial-up access, said the company is weighing its options. Microsoft, which has 5 million customers and charges $21.95 per month for Internet service, has no plans to raise rates, a spokesman said. |
