I wander if this news will have any effect on company like YAHOO and the like..
AT&T Drops Unlimited Internet Plan
By DAVID E. KALISH
.c The Associated Press
NEW YORK (AP) - Barely two years after exploding on the scene, cheap Internet access is fast going the way of the 10-cent pay phone call.
AT&T Corp. on Tuesday became the latest large provider of Internet service to scrap its flat $19.95 monthly fee for unlimited access, joining an industry move to stem the surge of users straining the global network.
The action follows a similar pullback by IBM's Internet service taking effect Wednesday - the same day America Online hikes its fee for unlimited access by $2 to $21.95 a month.
And Microsoft Corp. on Tuesday said it would raise its monthly rate for unlimited use of WebTV, which enables people to cruise the Internet on their television sets, to $24.95 from $19.95 starting June 1.
The moves reverse a trend started in 1996, when $19.95 a month became the accepted rate of admittance to a worry-free Web surfing experience.
The unlimited access fueled a sharp increase in users to about 55 million people currently in the United States. But naysayers rightly predicted the pricing plans couldn't outlast the strain on telecommunications networks originally built for voice transmission.
On one hand, many of the nation's roughly 3,500 Internet service providers still sell unlimited access. But few are making money, and nearly all are struggling to cope with bottlenecks that make it tough to get online during peak hours and delay the exchange of computer files and e-mail across the Internet.
GTE Corp. said through a spokesman Tuesday it would consider eliminating its $19.95 flat Internet rate if its users continue to spend more time online, now up to an average of 32 hours a month from 22 hours a year ago. NetCom and MCI, also big Internet service providers, said they had no plans to drop their unlimited plans.
Companies scrapping the plans said the move would only discourage extremely heavy users of the Internet, some of whom stay online for up to 13 hours and more a day.
With some Internet providers, ''20 to 40 percent of the traffic comes from 2 to 4 percent of the population,'' said Brian Oakes, an industry analyst with Lehman Brothers Inc.
AT&T, for instance, starting May 1 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.
But some less-heavy users complained that they didn't like the prospect of a clock ticking in the background, even if they didn't expect to surpass the threshold.
''I think that would be pretty lousy,'' said Guy Palmiotto, an AT&T WorldNet user with his wife. Palmiotto, a photo technician at The Associated Press, said he would consider switching to another service even though he only uses the Internet about 50 hours a month.
''It's a commodity that's not in short supply,'' he said.
AT&T said the strains on its network are its biggest priority.
''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 under the new AT&T plan.
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.
AP-NY-03-31-98 1726EST
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