While Compuserve stands out against offering flat rate unlimited access to its online services, AT&T and Prodigy are following the example set recently by America Online.
AT&T is expected to lower the price for Internet access to $19.95 a month for short distance subscribers. This is the flat rate set by America Online, which has significantly boosted its subscriber base in the past month. Long distance AT&T customers, who receive five hours a month of free Internet usage for their first year, will have this extended to 15 months. They already pay $19.95 a month flat rate.
Prodigy will also adopt the $19.95 fee for unlimited use of its online service, whose subscriber base has dwindled to under one million. It is currently charging $9.95 a month for 10 hours plus $2.50 for each additional hour. It already offers an Internet service for $19.95 and said users of its proprietary offering will now get this as well, for free.
The market is becoming more competitive by the month. Last week, long distance US carrier Sprint rolled out its own Internet service, also for $19.95 a month.
However, the companies may also have to refund money to infrequent users who would not have spent $19.95 a month under the existing pricing schemes. This happened last week to AOL, which will now offer a low usage rate.
With all the online services standardising on the $19.95 tariff, users are waiting to see which company moves first to undercut this in order to gain market share.
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