America Online Inc., seeking to encourage its subscribers to sign up for high-speed connections, is raising the price of its main dial-up plan to equal that of its new broadband offerings.
That means most subscribers will pay $25.90 a month for either dial-up or broadband beginning March 9, although AOL is offering discounts to dial-up subscribers who commit to a year. AOL currently charges $23.90 a month for unlimited dial-up access.
"We're doing this because a majority of AOL members will be able to get high-speed connections and access the AOL service for this new price," spokeswoman Anne Bentley said Tuesday. "Hopefully it's an encouragement for them to get high-speed connections."
Although AOL has been shifting its focus to providing free articles, video and other materials on its ad-supported Web sites, the company sees paid broadband accounts as key to making that strategy work.
AOL believes broadband will help boost usage and hence advertising. According to the Pew Internet and American Life Project, those with broadband at home are 52 percent more likely than dial-up subscribers to use the Internet on a given day, and the typical broadband user spends about 23 percent more time online daily.
In recent weeks, AOL announced partnerships with leading broadband providers to provide high-speed AOL subscription packages, which include the Internet connection, AOL e-mail addresses with unlimited storage and parental-control and security software.
The deals are with the four remaining Baby Bells -- BellSouth Corp., Verizon Communications Inc., AT&T Inc. and Qwest Communications International Inc. -- and with two leading cable providers -- Time Warner Cable, which like AOL is a unit of Time Warner Inc., and Charter Communications Inc.
AOL said most of its current customers will be served by at least one of those companies.
Details vary, but the packages generally cost $25.90 a month, $29.90 through BellSouth. The Qwest plan is for the first year only.
With Verizon and Time Warner, it is a limited-speed, 768-kilobit-per-second offering. It is even slower -- 384 kilobits -- for Charter. Dial-up is about 50 kilobits, while standard broadband lines typically reach 1.5 megabits or higher.
Subscribers are being notified by e-mail that they can essentially get high-speed for the same price as dial-up.
Those who can't get or don't want broadband can request lower-priced plans, including an unadvertised offering of about $18 with a one-year commitment (the broadband plans through the Baby Bells also require the year's commitment).
But if they do nothing, they are kept on the dial-up plan and will be charged $2 more a month.
Left unchanged are the $14.95 limited plan with 10 hours of dial-up and the $239.40 annual prepaid plan, which works out to $19.95 a month and allows subscribers to get a partial refund if they cancel early.
As of Dec. 31, AOL had about 19.5 million U.S. subscribers, down from a peak of 26.7 million in September 2002. About 75 percent are on dial-up.