New AOL Fee Hits Some Current Customers

America Online, the Internet and e-commerce division of AOL Time Warner, has increased by 50 percent the monthly fee charged to current users of its Bring Your Own Access service.

Last October, AOL instituted the same price increase for new users of Bring Your Own Access. The service was designed for consumers who go online using a competing Internet Service Provider, but who still want access to AOL's proprietary features and content, such as e-mail address and calendar, that aren't available on its Web site. Starting in March, both new and existing users in the United States will pay $14.95 monthly for the service, up from $9.95 a month.

The October price change for new users was not publicized, AOL officials confirmed in January. Also at that time, an AOL spokesperson stressed that the pricing change would only affect new users of the service, while existing users would continue to pay the $9.95 monthly rate.

That plan has changed. On January 15, AOL sent e-mail messages to existing Bring Your Own Access customers to inform them of the price increase taking effect in the March billing cycle, AOL spokesperson Nicholas Graham acknowledged on Tuesday. The 50 percent increase marks the first rate change in the Bring Your Own Access service since AOL launched it in 1996, Graham said.

Softening Blow

AOL will also offer its existing Bring Your Own Access users two free hours a month of connection time on the AOL network, charging $2.95 an hour for any additional connection time, Graham said. The company offers this service as a backup to users' primary ISP or for use when traveling, for example. Previously, Bring Your Own Access users were charged $2.50 an hour for accessing the AOL network, with no free hours.

When AOL acknowledged the price increase in January, an analyst noted that the popularity of the Bring Your Own Access option is only likely to grow as more people install broadband access at home. Although AOL offers a broadband service, like other high-speed access services, it is not available everywhere.

Competitive Climate

The rate increase means AOL will make about as much profit from Bring Your Own Access customers as it does from its dial-up customers, according to research by investment banking firm SoundView Technology Group. AOL won't lose income from its current customers who switch from dial-up to the less-expensive option, even though it does not involve access through AOL.

AOL is, however, putting more emphasis on broadband services. The company has beefed up its broadband benefits in the AOL 7 client, released last October.

The service's previous rate hike occurred in May 2001, when AOL hiked the cost of dial-up access to $23.90 monthly from $21.95, which had been the rate for three years. Dial-up access to Microsoft's competing MSN service remains priced at $21.95.