EarthLink honeymoon ends for some

No longer eagerly courted, longtime customers fume as the ISP locks them out of a 3mbps DSL upgrade offered to new subscribers.

Evan Hansen
Evan Hansen Staff Writer, CNET News.com
Department Editor Evan Hansen runs the Media section at CNET News.com. Before joining CNET he reported on business, technology and the law at American Lawyer Media.
3 min read
Some longtime broadband customers are complaining they're getting the cold shoulder as service providers fall over themselves to offer promotional deals and discounts aimed exclusively at new subscribers.

The issue cropped up for EarthLink last week, when the company quietly doubled top download speeds for its broadband service in some areas--for first-time customers only.

The offer brings EarthLink's DSL (digital subscriber line) service up to grade with competing cable broadband packages offered by Comcast and others, which typically charge between $40 and $45 a month for 3 megabits per second (mbps) or higher service in some markets. But the situation has irked some longtime EarthLink customers, who will have to wait indefinitely for faster download speeds.

"Those of us who are existing customers and have called customer service have been told we are out of luck," one EarthLink customer in Miami complained in an e-mail exchange with CNET News.com. "I personally have been with them for two years...It boggles the mind that a company would do this."

EarthLink, the third largest Internet service provider in the United States, on April 8 quietly upped its top download speeds to 3mbps for its DSL service in a handful of cities, including San Francisco, Los Angeles, Denver and Atlanta, where it rents lines from Covad Communications Group. The promotional package costs $29.95 a month for the first six months, after which the price jumps to $49.95.

An EarthLink representative said the company plans to offer 3mbps DSL service to all of its customers down the road. "Our plan is to offer that in the future," the representative said. "There is no time frame."

EarthLink's new offer comes as DSL and cable broadband providers are racing to sign up new customers, offering enticements such as free equipment and steep temporary discounts. By contrast, existing customers may get hit with the honeymoon effect, getting few if any follow-on perks once the initial sign-up deal runs its course.

"It's common practice to offer promotional deals to new customers, but if they get too discriminatory they can get driven out of the market," said Mark Cooper, research director for the Consumer Federation of America. "The practice is intended to attract new customers, but they run the risk of pissing off the old customers."

The complaint isn't limited to EarthLink or the broadband business, of course. Similar experiences of heavy customer courtship followed by fading attention are common in all walks of business--from cell phone makers to law firms to department store credit card offers, Cooper said.

Although such practices are common, companies may pay a price by focusing on new clientele at the expense of the old, for example, if customer dissatisfaction leads to costly customer turnover, or churn.

In its 2003 earnings report, EarthLink said its average monthly churn rate was 4 percent for the year. The company added a net 282,000 broadband customers for the year, ending 2003 with more than 1 million high-speed Internet subscribers, up from 779,000 at the end of 2002.

"I'm going to give them a couple of months to see if they announce anything, and if they still have nothing by then I'll jump to BellSouth," wrote the disgruntled Miami customer.