AT&T WorldNet reentered the mid-range Internet access market with the re-launch of its "new consumer service," a program that's been around for years. Welcome to the world of ISP marketing.

by Jim Wagner ISP-Lists Managing Editor [July 23, 2001]

In order to shine among top dial-up POP stars, some ISPs figure that the more service plans you offer, the more important you are.

Subscribing to this "more is better" standard, AT&T WorldNet rejoined the ranks of high-profile access providers with the reintroduction of its mid-range $17 a month service plan for Internet users—a pricing plan officials hopes to use in order to lure customers away from rivals like America Online, MSN and EarthLink.

It's a common practice among industry heavyweights in the ISP arena—price service offers and programs such that one provider has an edge over competitors. But in the end, these service programs are little more than re-hyping the same old service.

To do a little spin doctoring of its own, AT&T executives re-launched a service they've had for years. If you're confused—join the club.

The "new" service is crafted to nab a niche demographic gaggle of Internet users—those that are in-between casual and looking-for-a-bargain pricing plan. Basically, AT&T officials brushed off the current $20 limited access plan and gave it some polish to land it between the i495 program and unlimited premium services priced for just under $22 a month.

Ed Chatlos, WorldNet vice president and general manager, said it gives consumers a choice, "another option beside watching their Internet bills get bigger as a result of recent price increases from other ISPs."

Translated, this means that AT&T developed a service option that's cheaper than AOL and EarthLink—who just raised their monthly service fees by about $2 per month.

When new is not news
The "new" service has been around years, WorldNet originally launched its 150-hour a month service plan in March, 1998. For about 20-bucks, WorldNet users got limited usage, but a better bargain than its own premium unlimited service plan, which was priced to match the rest of the industry's similar programs.

For several years, this was the service touted by WorldNet. Visit the Web site or watch the commercials on TV, and this is the service you'd see. The premium, unlimited service lurked in the background—there for the Internet junkie who needed unfettered hours.

It's still around, and AT&T has plenty of customers signed up for the premium service. According to Janet Wyles, WorldNet spokesperson, it just hasn't gotten the air play it had in the past.

"It was our lead offer some time ago, and given what we've seen happening in the industry lately with the price increases, we felt it was time to introduce a lower-cost plan," Wyles said. "We haven't advertised the $19.95 plan in some time. Our advertising lately has been around newer offers because we're constantly coming up with new offers."

That changed in late 2000, when now defunct free ISPs like 1stUp.com and Spinway went the way of the dinosaur, stranding the million of users who only used free access plans to connect to the Internet.

For those customers, AT&T WorldNet introduced its $4.95 plan in the first week of January 2001. Significantly cheaper that most rival offers, but not quite free, the plan allowed users to return to the Internet—albeit with an ever-present ad banner—and avoid higher priced services. This new program, dubbed i495, was given top billing on WorldNet commercials and on its website.

Pole-to-pole
Which brings us full circle to this week's announcement—re-launching a limited-access plan.

Most of the major ISPs play this tiered-access pricing game, it's the way each can offer services they say the others can't offer.

• A visit to AOL's website shows it also has a variety of pricing plans, in addition to its $23.90 monthly service. The ISP has five different pricing plans, one for every occasion it seems. Prices go all the way down to $4.95 a month for the world's largest ISP, although the number of people who use the Internet for only three hours a month is very (spelled v-e-r-y) small. But, the price is there and AOL officials can say they offer a small pricing plan than other ISPs.
• Juno Online Services runs a similar deal with its free service. That's a lot cheaper than the $16.95 WorldNet charges for Internet access, and it gives them an opportunity to bump them up to its premium $14.95 "super size" service.
• Prodigy Internet offers three pricing plans for its service, similar to WorldNet. At the bottom of the pricing barrel, users can sign up to the ISP for $9.95 and receive 10 hours (not much when compared to WorldNet's 150 hours, but sheer Internet indulgence paired up with AOL's $4.95 offering). For $19.95, users get unlimited hours. For $21.95, they get unlimited hours plus 10 additional e-mail boxes.

So there's the plan for all you ISP business-like folks. Don't bother developing new services or adding value to connectivity. The real money is in reinventing your world—or should we say WorldNet?

— End