November 27, 1996 12:45 PM PST

AOL warns of slowdowns

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Get ready. Get set. Wait. America Online (AOL) is warning its subscribers that they may face this scenario on Sunday as soon as 7 million AOL members start taking advantage of unlimited hours pricing.

AOL is expecting a "surge of usage" as the new $19.95 all-you-can-eat rate takes effect December 1. All members on the current $9.95 per month plan will automatically be charged the new rate.

This week, the service sent postcards informing members about the new pricing and warning them that it expects a network slowdown during peak hours starting Sunday. Why? Because it thinks users will celebrate the new flat-fee plan by going online for hours and hours.

"Now that people won't have to worry about the clock ticking and can take full advantage of all that AOL and the Internet have to offer, we do expect a surge of usage in AOL," the postcard states. "No matter how hard we try, however, we do expect the sudden increase in use--as our millions of members benefit from the new unlimited pricing--to create some temporary 'traffic congestion' especially during our peak periods, which are typically 8 p.m. to midnight."

AOL, the postcard goes on to explain, is "racing to put new systems in place to handle the increased demand."

In early October, AOL struck a $340 million deal with BBN to expand its dial-up network, but this system is not yet fully implemented.

The postcard also gave some information to users about the new pricing plan: "This new rate goes into effect automatically in December, on your normal billing date... You only need to contact us if you prefer a different billing option or if you would like the limited rate to go into effect sooner than your normal billing date."

The postcard listed an online keyword for more pricing information and a toll-free number to call for questions on the pricing plan. While the postcard didn't mention it, in fact members can keep their $9.95 rate for five hours of access or move to an even less expensive rate of $4.95 for three hours of access, but they have to contact AOL to do so. If they do nothing, they will automatically be switched over, a plan that has drawn legal fire in 18 states.

But apparently lots of users do already know about their pricing options: on Wednesday morning, when CNET called the number listed on the postcard, the line was so swamped that after waiting 25 minutes an operator said that all the mailboxes were full and directed users to go online to change their billing options.

These inadequate preparations might not satisfy all of the 18 attorneys general still investigating AOL's implementation of its new pricing.

"Consumers should have an opportunity to decide rather than have a company decide for them," said Jack Norris, assistant attorney general for the state of Florida. Norris was one of 18 attorneys general to sign a letter complaining about AOL's "negative option" billing. That group has been in negotiations with AOL for several days.

AOL last week came to an agreement with the state of Washington resolving its complaints. The agreement requires AOL to display a pop-up screen where new users have to either select the $19.95 option or check "other options."

The agreement didn't resolve the complaints of the other attorneys general or a customer who filed a class action suit against AOL this week in New York.

"I can safely say that Florida will require more than that postcard notification," said Norris.

 

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