NEW YORK (AP) -- AT&T Corp. today said it would eliminate its flat $19.95 monthly fee for unlimited Internet access, in the latest
industry move to curb the onslaught of users straining the global network.
Starting May 1, AT&T will charge an extra 99 cents for every hour people spend on line exceeding 150 hours of monthly use, in addition
to the $19.95 fee. AT&T, with 1.2 million customers, is the nation's largest provider of Internet-only service.
The move is the largest crack yet in the industry's move to flat rates two years ago. Internet service providers are struggling to cope with
steadily rising usage by online customers exploiting the flat rate, which has strained telecommunications networks originally set up to
handle voice transmissions.
America Online Inc., the largest Internet service also offering its own online programs, in February hiked its monthly $19.95 fee for
unlimited access by $2 for its 11 million customers, saying it needs to upgrade its network.
''The Internet has arrived as a mass medium and usage is soaring,'' said Dan Schulman, head of AT&T's WorldNet service.
Schulman stressed in a telephone interview that 97 percent of AT&T's customers used the Internet an average of about 25 hours a month
and wouldn't pay any more.
The remaining 3 percent were spending an average of 400 hours per month logged onto the service, making it difficult for others to log on
in some cities.
The elimination of the ''all-you-can-eat plan is the difference between a smorgasbord and a five-course meal,'' he said.
AT&T said at the same time it will add modems, lines and access numbers in selected cities where customer demand is heaviest to speed
access to the Internet.
It also said it will lower rates on an alternate plan that encourages people to stay online for a shorter time. These customers will pay the
same $9.95 for 10 hours of monthly usage as they do now, but will be charged 99 cents an hour for each hour beyond 10, down from
the current $2.50.
Another large Internet service provider, MCI Internet, and Microsoft Network, the second-largest online service after AOL, have said
they had no plans to raise rates. |
