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AT&T to raise Net access fees

The telephone behemoth is expected to announce price increases tomorrow for some WorldNet customers but will promise more reliability.

AT&T (T) is expected to announce price increases tomorrow for some WorldNet customers starting in April but will promise more reliability, CNET learned today.

According to sources familiar with the plan, AT&T will start charging its long distance customers--basically its light Net access users--$4.95 per month for the first five hours of Net access and $2.50 for each additional hour. The company now offers the first five hours for free, but that promotion will end March 31 after having been extended from December.

The new rates are similar to what America Online charges for a similar light-usage plan. AT&T wouldn't comment except to say that it will announce "pricing and reliability initiatives" tomorrow.

The expected increase may reflect difficulties encountered by Internet service providers in making money while attempting to charge flat $19.95 rates for Net access. Some ISPs are stressing reliability but charging more for it.

Netcom, for example, is expected to raise its rates as early as next month and focus on small and medium-sized businesses. But AT&T's plan is less drastic, still targeting homes as well as businesses.

AT&T will continue to offer monthly unlimited access for $19.95, as well as charge $4.95 per month for the first three hours of Net access to customers who don't use its long distance service. After that, they will pay $2.50 per hour.

In terms of increased reliability, AT&T will stress the size and strength of its backbone. It also is continuing to add more local access numbers for customers. The announcement is expected to stress the need for dependable email and Net access as the market grows.

Last November, AT&T said half of its Internet users were hit by an email problem that halted message delivery for more than 24 hours. It attributed the problems to hardware failures in the database service.

AT&T has been offering WorldNet for about a year. The service has more than 750,000 customers.