AT&T, Sprint changing prices

The long distance carriers are making key changes in their pricing for Internet access.

Jeff Pelline Staff Writer, CNET News.com
Jeff Pelline is editor of CNET News.com. Jeff promises to buy a Toyota Prius once hybrid cars are allowed in the carpool lane with solo drivers.
Jeff Pelline
2 min read
AT&T (T) and Sprint Communications (FON) are making key changes in their pricing for Internet access, CNET has learned.

In an announcement tomorrow, AT&T is expected to raise prices for some customers of its WorldNet access service--basically its light Net access users--starting in April but will promise more reliability.

According to sources familiar with the plan, AT&T will start charging its long distance customers $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.

Sprint, the nation's third-largest long distance carrier, is expected to move away from its $19.95 "all you can eat" pricing for its Internet Passport service by year's end. "Nobody's married to $19.95," company spokesman Jeff Shafer said.

No decision has been made, but options include tiered pricing, such as "premium service," for a less crowded, more reliable network. Sprint, which has 60,000 customers, also might charge a premium for users who keep their connections open all day.

The goal is to even out time of usage among all its customers; currently, it is weighted toward too many heavy users. Tomorrow, the company also will begin offering a Macintosh version of its product.

The pricing changes by both AT&T and Sprint may reflect difficulties encountered by Internet service providers in making enough 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 and 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.