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IBM changes access fee structure

The company announces it will charge users extra who spend more than 100 hours per month online, to move away from the unprofitable flat-rate scheme.

Customers of IBM Internet Connection Services who are used to paying $19.95 per month for unlimited Net access will have to pay extra if their usage exceeds 100 hours per month, starting April 1.

The switch, announced to customers online, is the latest attempt by Internet service providers to get away from "all-you-can-eat" Net access for $19.95 per month, a pricing scheme they say is unprofitable.

"We have a goal of keeping costs affordable to the majority of our valued customers," the company said on its Web site. "Our research shows that while only a small percentage of our customers regularly exceed 100 usage hours per month, these customers consume a significant percentage of our capacity. The [new] plan is being implemented in order to maintain a high quality of Internet service while sustaining monthly Internet service fees that are affordable to the majority of our customers."

ISPs and online services have been struggling to come up with a profitable pricing scheme. A problem for them has been users who stay logged on all day to get email. America Online and Concentric Network have policies that encourage users to log off after a certain period of time. Others, such as Netcom and CompuServe, have steered away from the flat $19.95-per-month rate. CompuServe, for example, has flat-rate pricing at $24.95 per month, $5 above the standard monthly rate.

IBM's new pricing scheme will be called the "Comprehensive Plan," instead of the "Unlimited Plan." In the United States, for example, users who exceed 100 hours per month will pay an extra $1.95 per hour. The fee schedules differ in other countries. The 100-hour cap is being implemented in 28 countries. It applies to the cumulative total for all users (parents and children, for example) under one account.

IBM Internet Connection Services for Education customers will undergo the same change on July 1.