AOL Watch ("The AOL List"): Phoney Phone Rates

David Cassel (
Thu, 12 Mar 1998 15:00:50 -0500

		      P h o n e y   P h o n e   R a t e s


"You've got junk mail!"  

AOL used subscriber home addresses to send unsolicited junk-mail last week
hawking a long-distance service.  Calling it a "member perk", the pitch
urged subscribers to switch carriers. 

"I trashed it," one AOL Watch reader remarked, "because if it's like the
online service...NO THANKS!"  The advertisement arrived one day after
AOL's two-and-a-half hour nationwide outage last Monday (saying AOL Long
Distance was committed to "delivering the world class customer service you
expect...") The same day, e-mail problems lingered.  "I've been trying to
get mail in for over a day now," a subscriber told Ziff-Davis News, "only
to be told that service is unavailable." Ziff-Davis also reported they
were unable to send mail to AOL Tuesday afternoon--and noted a
crash-inducing security hole had been discovered in AOL's "Instant
Messenger" software.

But perhaps the service -- Tel-Save -- should change their name to
"just-TELL-them-they-save."  AOL's own advertisements showed MCI's rate
was 44% cheaper on Sundays, at five-cents-a-minute
( ) -- and today MCI announced they
will match Tel-Save's pricing every other day of the week!

MCI will also offer its customers unlimited internet access for $14.95 a
month -- allowing them to get an internet service AND access to AOL for
just $3.00 more than the cost of AOL dial-up access alone. 

MCI announced their pricing last week -- so AOL went ahead with an
advertisement Monday that claimed AOL had negotiated a deal for
long-distance service at "an unbeatable price." 

Since MCI's rates became effective Monday, AOL's price was unbeatable --
for the hours remaining before MCI opened for business.

It's not the first time AOL's "perks" have actually consisted of higher
prices.  For instance, AOL Watch reader Mark P. enjoys the nationwide
flower distributor 1-800-Flowers, and usually purchases flowers through
their web site.  When he visited the flower vendor's AOL area last June,
"A quick jump over to the 800-Flowers web site confirmed my suspicions --
it was $1 more on AOL."

There was no mistake.  "A brief check of other items on the site showed
all service charges on AOL were $1 more than what the 800-Flowers web site
showed."  Discrepancies persisted six months later.  "Some things were the
same price...but others differed by as much as $2 or $3." 

And it's still true today.  Amazingly, AOL's subscribers can by-pass the
surcharge simply by using keyword instead of
keyword "flowers".  AOL aggressively promoted the more-expensive option on
their welcome screen and exit screen before Valentine's Day ("Last
chance!" messages warned, and "Don't wait!")  -- though in a kind of
cover-up, the price difference for roses vanished two nights before the
14th.  "The daily featured selections were usually equally priced," Mark
P. remembers.  "It was the other, non-featured items that showed the price

AOL affected Valentine's Day in other ways.  A correspondent for Yahoo! 
Internet Life writes that he sent several e-mail valentines to his
sweetheart on Thursday, February 12th. "They arrived Sunday evening... the
15th. That's nearly 72 hours to go from my office upstairs to her laptop
in the dining room downstairs!"

"I knew something was up when she put a deadbolt on her peignoir,"  he
concluded.  "Thanks a million, AOL."

"This is just another example of AOL adding NO value to one's internet
experience," Mark P. observed.  In fact, it's not hard to see why AOL
pushes the more-expensive services.  In the case of Tel-Save, AOL plugs
them "in return for a 50% to 70% cut of the pre-tax profits
Tel-Save generates on revenues created from AOL's marketing efforts," the
Motley Fool reports.  ( ) 
In addition, AOL received a king's ransom of $112 million for their
efforts.  Herb Greenberg, a well-respected finance columnist, noted that
"It was a good deal for AOL, which was in dire need of cash."

But the value of the offer depends on carefully-selected information. 
AOL's mailer gives the price of a ten-minute MCI call as $2.50 -- when in
fact, it's now just 90 cents -- and 50 cents on Sunday.  (AOL's on-line
advertisement concedes that only 150,000 members had signed up for their
service--despite aggressive marketing pushes.)  

Subscribers shouldn't be surprised to receive junk mail from AOL. "We rent
addresses of members to pre-selected companies," Steve Case conceded in a
July announcement. Though this practice is virtually unknown among
internet service providers, cash-hungry AOL saw their user's home
addresses as an irresistible gold mine. 

For angry subscribers, the best offer might be Earthlink's "Get Out of AOL
Free" card.


"I'm not sure how much longer I'll keep AOL," one subscriber complained. 
"I'm down to 40 megabytes free on this old hard drive -- and that 14 megs
in AOL's directory is looking mighty useful..." 

Though AOL's television ads feature a teenager describing AOL as "so easy,
even my parents can use it," the AOL Watch reader reports the opposite
response.  "My 12-year-old is telling me to dump it, and HE'S the reason
I've kept it!" 

        David Cassel
        More Information -


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