AOL tests waters for dial-up price cut

As Internet users flock to high-speed services, America Online experiments with lower dial-up prices.

Alorie Gilbert Staff Writer, CNET News.com
Alorie Gilbert
writes about software, spy chips and the high-tech workplace.
Alorie Gilbert
America Online has temporarily dropped prices for its dial-up Internet service in an effort to stem the tide of customers switching to alternative services.

The Time Warner company has cut the price of its unlimited dial-up service to $19.95 a month from $23.90 for new U.S. subscribers who sign up within the next few weeks. AOL is similarly lowering the price of its 10-hours-a-month dial-up service to $9.95 a month from $14.95 for a limited time.

The special offer, which also includes 50 free days of service to new subscribers to the $19.95 plan, is aimed at broadband subscribers who want dial-up when they're away from home, an AOL representative said. The company has no plans for a permanent price change, the representative added.

AOL is the largest Internet service provider in the United States but has been steadily losing subscribers to lower-cost dial-up services and high-speed services from cable and phone companies. A study last year by ComScore Networks revealed high-speed service is rapidly gaining ground on dial-up, with about half of all Internet users in many major U.S. cities relying mainly on broadband connections.

AOL is also under attack by cheaper dial-up service providers such as NetZero. That rival offers unlimited dial-up packages for as low as $9.95 a month, a deal it currently advertises on its Web site as "half the cost of AOL."