By Gary Kirchherr
Recent media reporting on Internet pricing in the wake of America Online's price hike has left me dumbfounded. The premise is, AOL raised its prices to $21.95 a month, so $19.95-a-month Internet access is toast. Good grief. Are these "reporters" entirely incompetent, or, like so many of their ilk, do they believe that their J-school sheepskins are licenses to pursue their own agendas? Or maybe they're desperate to hand in something, anything, on a slow news day, so they invent the news and pass it off as fact.
In my Feb. 28 column, I noted in passing an article by Jennifer Files in The Dallas Morning News; Ms. Files was convinced all ISPs are going to raise their prices just because AOL did, and that customers would obiedently go along with this. After all, she had an AOL user who wasn't going to switch because the price was "only" $24 a year more for the privilege of using the worst ISP in the world. Files apparently didn't see the ZDNN poll of AOL users that showed 4 out of 5 polled saying yes, they will switch because of the price hike. But this is old news.
Now comes David E. Kalish of The Associated Press, who in an article a month ago sought to enlighten us thusly: "Barely two years after exploding on the scene, cheap Internet access is fast going the way of the 10-cent phone call."
Oh? What leads to that extraordinary conclusion? Well, IBM hiked its monthly rate from $19.95 to $21.95 shortly after AOL did the same. Micro$oft raised the price of its WebTV "service" from $19.95 to a ludicrous $24.95 a month. And AT&T now will be charging 99 cents for every hour over the 150 a month its lucky users get for $19.95 a month. This, um, stampede of rate hikes, according to David E. Kalish, "reverse[s] a trend started in 1996, when $19.95 a month became the accepted rate of admittance to a worry-free Web surfing experience." That is, if you consider AOL's myriad ongoing problems and WebTV's Close-N-Play functionality "a worry-free Web surfing experience." But I digress.
In my aforementioned Feb. 28 column, I mentioned the vertical market - i.e. one more or less unaffected by price increases - that comprises the bulk of AOL's "membership." AOL can raise its rates - or thinks it can - because so many of its members believe AOL is "easy" and the Internet is "hard." Some are just too lazy to switch. Others, of course, will keep AOL because it's so easy to conceal one's identity with disposable screen names and profiles, but that's another story. I submit that vertical markets similar to AOL's exist in big-name ISPs like IBM and AT&T. Hey, they're blue-chip companies, so they've got to be worth the extra price, right? Why switch from a major name? Answer: Because you're being played for a sucker. In case you really wanted to know.
But the most egregious example of this vertical market is WebTV's price hike. Why was WebTV's increase the largest - a whopping 25 percent? Consider that those who own WebTV devices must use WebTV's proprietary Internet service, or at least pay $9.95 a month to access another one. A monopolistic arrangement - from a wholly owned subsidiary of Micro$oft! Fancy that!
WebTV's FAQ didn't say as of May 1 whether a price hike is in the works for the $9.95 "OpenISP" feature or the WebTV Plus system, which already was $24.95 a month. But the bottom line is, to put it bluntly, WebTV'ers are screwed. Those using its basic service either agree to WebTV's price hikes, or they're stuck with a couple of hundred dollars' worth of high-tech doorstops. Keep that in mind the next time some know-nothing fool says what a great "bargain" WebTV is.
If David E. Kalish had wanted to present a balanced perspective on the issue of price hikes, he would have mentioned the ISPs that are targeting their advertising to disenchanted AOL'ers by pointing out their now-lower monthly rates (and, sometimes, with digs at AOL's lousy track recordo). Even I knew about them; I mentioned them in that Feb. 28 column. David E. Kalish would have known that Yahoo! Online is offering $14.95-a-month Net access to MCI Long Distance customers - and even for those who don't use MCI, Yahoo! Online still is only $14.95 for three months, and only $19.95 a month after that. Why is Yahoo! Online now offering this, if the $20-a-month concept is such a money-loser, David E. Kalish?
While you're figuring that one out, why don't you call the many ISPs in my hometown of Anchorage and find out why their prices have remained fixed at $20 a month or less? My own ISP, Micronet, offers fine service with five e-mail addresses and 10 megs of Web space for a prorated cost of $16.67 a month. Why do bargains like this exist if $20-a-month service is going the way of the 10-cent phone call, David E. Kalish?
The lesson here is simple. Read Internet stories like this from the national media with a critical eye. More often than not, the copy isn't worth the newsprint it's printed on.
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