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To: Maverick who wrote (1163)	2/10/1998 9:36:00 PM
From: blankmind	Read Replies (2) \| Respond to of 1629

Internet charges seen headed higher after AOL move By Eric Auchard Tuesday February 10, 8:33 pm Eastern Time NEW YORK, (Reuters) - Consumers can expect to pay more for unlimited access to the Internet in the wake of America Online Inc.'s [NYSE:AOL - news] move to boost monthly access charges by 10 percent, but the price hikes will not be uniformly felt. ''You bet Internet service providers are going to raise prices. You bet,'' said Ulric Weil, a financial analyst with brokerage firm Friedman Billings Ramsey & Co. ''I think other ISPs will follow in short order,'' agreed Peter Krasilovsky, an industry analyst at online research firm Arlen Communications, referring to Internet service providers. However, initial reactions by major Internet service providers were cautious to Monday's news that America Online will boost the price of monthly flat-rate service for Internet access by $2 from the industry's going rate of $19.95. Spokesmen for AT&T Corp., MCI Communications Corp. [Nasdaq:MCIC - news], Sprint Corp. [NYSE:FON - news], MindSpring Enterprises Inc. [Nasdaq:MSPG - news] and EarthLink Network Inc. all said they always are evaluating pricing but have no immediate plans to alter their $19.95 all-you-can-eat offers. But local phone operator Bell Atlantic said it was reconsidering its pricing plans for Internet service in the 12-state calling region it serves from Maine to Virginia. ''We are evaluating pricing in light of this event,'' Bell Atlantic spokesman Larry Plumb said, but declined to comment further. CompuServe, which recently became a unit of AOL, also said it had no plans to alter its $19.95 per month price for unlimted Internet access. Microsoft Corp [Nasdaq:MSFT - news].'s Microsoft Network, the third leading U.S. supplier of Internet access after America Online and just behind CompuServe, declined to comment on its price plans. But analysts believe the industry was breathing easier following AOL's move. ''The first reaction for a lot of ISPs was to breathe a large sigh of relief,'' said Jim Balderston, an industry analyst with Zona Research in Redwood City, Calif. ''This is an opportunity to expand in a small way the razor-thin margins they operate on,'' he said of the narrow profit margins they must operate under at rates under $20 a month. Balderston speculated that many service providers will be looking for ways to re-introduce a la carte pricing for various services instead of the flat-rate pricing that has become widely accepted after AOL adopted the rate in late 1996. Consumers may pay find themselves paying several dollars extra per month for higher-volume Internet use or for services like Web hosting, in which the access provider creates a personalized Web site for the user. Jack Rickard, publisher of Boardwatch magazine, which tracks the Internet service industry, said he believed it was only a matter of time before other major ISPs catiously move to bump up prices. ''As a general trend, if they see AOL survive the increase, the larger players -- like MCI and Sprint -- will try and follow suit,'' Rickard said. But while larger Internet service providers may join America Online in charging higher rates, some smaller, regional providers are likely to continue to compete on price by offering unlimited Internet access as low as $10 per month. For example, Erol's Internet Inc., an ISP operating in the Mid-Atlantic states, currently offers a rate of $10.95 for full access to the Internet without hourly charges. The discount plan requires customers commit to three years of the service. ''Pricing is going to continue to be all over the map,'' Rickard said, citing the diversity of companies offering such services. There are more than 4,500 Internet access providers operating in the United States and Canada, according to Boardwatch magazine's tally.