EarthLink to boost Net subscription rate

Internet service provider EarthLink on Tuesday said it plans to raise monthly rates by $2 for its basic, unlimited Net service.

The price increase to $21.95 from $19.95 will go into effect July 2 for all new subscribers and Aug. 1 for most of the company's existing customers. The move will affect approximately 3.1 million customers.

With the price change, EarthLink follows the lead of Internet heavyweight America Online, which last month boosted its rates by 9 percent.

In May, AOL upped its subscription rates by $1.95 to $23.90 for those using its monthly unlimited plan. At the time, EarthLink said it was weighing its options and could respond by raising its own rates, by initiating a campaign to nab AOL subscribers to a cheaper service, or by doing nothing.

EarthLink spokesman Dan Greenfield said the rate change is not a direct response to AOL's increase.

"We're looking at what's best for our subscribers and for our business model," Greenfield said. "As our customer base grows and usage increases, we're making equipment upgrades and service enhancements to improve the quality of our service. We felt this was the right time to make adjustments in the monthly subscription fee."

This is the first-ever rate increase for the company, Greenfield said.

Microsoft's MSN service said it would not follow AOL's precedent and has not moved to increase its prices.

Just one week after AOL's price increase, MSN launched a $50 million nationwide ad campaign designed to persuade customers to ditch their AOL service and sign up for the Microsoft service. MSN is offering customers who switch to its service by the end of June three months of free Internet access and a $21.95 monthly rate guarantee until January 2003.

EarthLink said that, along with raising the monthly fee, it is improving the basic service with features such as seven extra e-mail boxes and more Web storage space.

Customers may select a one-year, prepaid option for $19.95 per month, the company said. In addition, EarthLink will extend the $19.95 monthly rate for 90 days for new customers signing up for its unlimited dial-up Net service between June 1 and June 30.