Customers in Washington DC and Chicago can try out the faster AOL service for $29.95 per month.
AOL moved along as modems increased in speed, starting with support for 2400 baud modems. Eventually the company supported the fastest modems available, with speeds of 56k. And for a while, that was the Internet speed limit for millions of Internet users.
Over the past few years, cable and telephone companies have been offering faster connections; many more Internet service providers have appeared, offering dial-up at better rates. Although AOL offers a selection of content and ease of use that other providers do not, many consumers felt comfortable enough surfing the Web that they felt ready to move on to cheaper or quicker alternatives.
AOL has been trying to stem that tide of departing users, first by offering more content. Pricing was still a strong motivator, so the company began offering a $9.95 dialup product under the Netscape brand. But the desire for a faster experience and stronger marketing from cable combined to move more customers away.
Now, AOL has begun a test of DSL service, with the intent to roll it out nationwide later this year. The $29.95 price competes well in DC, but faces a stronger challenge in Chicago.
Users in Illinois and 12 other states have the chance to sign up with SBC Communications for DSL service priced at $14.95 per month. It’s the first time a high-speed Internet service has cost less than AOL dialup.
AOL still boasts 21.7 million subscribers. And it has made efforts to garner a bigger share of the $9.6 billion Internet advertising market via its free AOL.com web site. Recently the company began offering free e-mail accounts to users of its AIM service. Those accounts will feature ads.
The company will add other content to the AOL.com web site, and it may soon find itself competing not only with other ISPs, but with portal companies like Yahoo as well.
David Utter is a staff writer for Murdok covering technology and business. Email him here.
