AOL Goes Flat!

New pricing plan for AOL'ers

By Michael Webb, Publisher and Editor-in-Chief,

The latest wrinkle in the Online War is an almost shocking one.

You may have gathered from the title of this article that America Online had gone out of business, but that is very much not the case. In fact, what they have done will probably go a long way towards guaranteeing that they stay in business for some time to come.

Mass number of Internet Service Providers (ISP's) have sprung up in recent times, generally offering users a flat rate/unlimited usage account for internet access. There's no doubt the Online Services, proponents of the hourly-charge philosophy, have been feeling the crunch. CompuServe's answer was to launch WOW!, basically a new online service with flat rate access, earlier this year. They kept the classic CompuServe network on the not-so-flat rate, however.

Not to be outdone by the seemingly parasitic ISP's, or by it's biggest competitor (CIS), online service provider giant America Online made a bold move recently, putting all its members on a $19.95/month unlimited access flat rate. They now offer their entire proprietary network, as well as the internet, to its 6 million or so subscribers, all for one simple rate.

Some subscribers are overjoyed about this change, whereas others use the network so little that the older, less expensive several-free-hours-followed-by-an-hourly-rate makes more sense to them. Both plans are available, incidentally; but some subscribers were annoyed that they had to expressly inform AOL if they didn't want to be put on the new plan.

What does this mean for...

This should probably go under the category of "significant events." It's hard to tell exactly what the results of AOL's pricing change will be, but it should be a very interesting story to follow.