Embracing a tactic that has hammered it, America Online Inc. is offering a new flat-rate price in a bid to stem the defection of customers to cheaper providers of access to the Internet.
The new $19.95 monthly fee, effective Dec. 1, offers unlimited access to America Online's electronic services and media as well as the Internet. It marks a turnaround for America Online, which earlier this month offered the $19.95 rate but for only 20 hours use, tacking on $2.95 for each additional hour users spent online.The pricing shift, announced Tuesday, was part of a broader response by the nation's largest online service to industry criticism that it wasn't doing enough to protect itself against growing threats from electronic interlopers.
The company had previously stuck to charging per-hour fees on top of a base rate even as it warned it was having trouble keeping subscribers because of rivals offering unlimited use of the Internet for a single fee.
And in an acknowledgment that its financial statements may not have been accurately reflecting the company's condition, America Online said it would account for its high marketing costs as they are incurred, instead of deferring the expenses among future financial reports.