New York-based Juno will attempt to do this by imposing some restrictions on subscriber usage, a common practice among paid services. The company said the step is aimed at reducing network costs, but it denied its free service model is in trouble.
"The hope is this could push us more toward improving the bottom line," said Juno chief executive Charles Ardai.
Ardai added that the move is not an indication of the company migrating from free Internet access, a business that has faced persistent doubts because of its dependence on advertising.
Just last week, Internet holding company CMGI announced it would "wind down" 1stUp.com, its free ISP. The Andover, Ma.-based company blamed the planned closure on an unhealthy online advertising market and "insurmountable" capital costs to maintain the business.
In an email sent to subscribers Monday evening, Juno said it will begin displaying more advertisements to free subscribers that the company deems heavy online users. Juno will also make it harder for heavy online users to maintain a consistent Net connection, especially during business hours.
The policy change is also an attempt to sway such customers into becoming paid subscribers, according to Ardai. Juno's paid subscribers--who typically pay $9.95 a month--do not receive the persistent ad banner and get more reliable Net connections.
"We realized that a disproportionate consumption from our users was costing us a lot of money and that in the interest of reducing expenditures...that seemed like the wise thing to do," Ardai said in an interview.
Ardai said that about 5 percent of Juno's free ISP subscribers consume about half of the company's telecommunication hours.
The move by Juno is not unique. ISPs have traditionally imposed caps on network usage to weed out so-called bandwidth hogs. ISPs including America Online and AT&T WorldNet, for example, have introduced usage limits or hiked subscription prices to address the problem.
The costs of running an ISP can grow significantly given the number of hours of access given to its customers. Heavy Net use by individual customers can also limit the performance speeds for dial-up ISPs. Many ISPs experienced this when they switched to flat-rate pricing, which lets a customer pay a monthly fee for unlimited access.
Free ISPs, which depend on selling advertising banners for revenue, are not immune to heavy network use. Juno's Ardai said that Tuesday's decision could help improve the financial performance of the company by cutting costs and potentially tapping more consistent subscriber revenues.
Juno has 3.7 million customers, 2.5 million of whom use its free ISP service.