AOL Watch: Shakedowns

David Cassel (
Sat, 27 May 2006 18:42:17 -0400

 			    S h a k e d o w n s


This month AOL laid off 1,300 of their customer service employees. Another 700 
were laid off last fall.

After this month's layoffs, callers to AOL began hearing a recorded warning 
that "Due to 'system enhancements,' members may experience longer-than-normal 
hold times." (AOL's recording then apologized for this "temporary" 

The real reason for the layoffs may lie in AOL's most-recent quarterly report. 
Released May 3, it shows that in the last year over 3,000,000 AOL subscribers 
cancelled their accounts!


In fact, on average 9,277 AOL users cancel their accounts every single day.  An 
AOL user cancels their account every nine seconds. In the time it's taken you 
to read this paragraph, another AOL user has already cancelled their account.

But even more accounts are being cancelled than those figures suggest. AOL once 
reported an increase of 400,000 members for a three-month period when 1.7 
million members cancelled their accounts. AOL had performed a marketing blitz 
in that same period to attract 2.1 million new members.

Their most-recent figures use the same accounting trick.  For the last 90 days, 
AOL reported a drop of 835,000 members.  But AOL included over 2 million 
non-paying members using free trial accounts (or members who received discounts 
or free months of service).  This suggests that nearly 3 million AOL members 
have called to cancel their service in just the last 90 days!

In fact, PC World magazine recently named AOL "the worst technology product of 
all time," and marveled that "all the while, AOL remained more expensive than 
its major competitors.",aid,125772,pg,2,00.asp

A desperate AOL has tried retaining members with price discounts. Over 11% of 
AOL's users are now on free-trial accounts (or the special free or reduced-rate 
accounts given to members who attempt to cancel). AOL also reports 31% of their 
members are on the cheaper 3-hour or 10-hour pricing plans, or on plans that 
generate less than $15 a month.  Cash-hungry AOL recently raised dial-up prices 
by over 8% - but now they're predicting that more members will simply switch to 
the cheaper plans.

AOL now expects the higher prices will slow down their badly-needed drive for 
new members, and they acknowledge that their ad campaigns are already bringing 
in fewer new members.  Two statistics tell the story.

    - Since 2002 AOL has lost 30% of its members.
    - The number of AOL subscribers is lower than any time since 1999.

And yet AOL admits that in "the foreseeable future," they're expecting their 
subscriber count will drop still further!

A Washington Post columnist summarized the emails she'd received from readers. 
"There must be 50 ways to leave your AOL."  She even offered a handy tip. 
"[H]ardly anyone -- including myself -- seemed to know they could continue 
reading their AOL mail for free, even if they quit AOL and never paid the 
company another dime." It's surprisingly simple, according to the reporter. 
Users simply create a free web email account at, and then activate its 
automatic forwarding of email from their old AOL address.

When one user told AOL they knew they could continue receiving their email 
after cancelling the account, AOL immediately rescinded the $2-a-month price 

The Washington Post also reports that "to offset the shrinking number of 
subscribers who pay a monthly fee," AOL is trying to sell more advertising - 
even if this means installing ads on their users' web pages.  "They're flashing 
and screaming at the top of my blog," one AOL user complained. Though the "AOL 
Journals" service had been ad-free for several years, AOL's need for revenue 
apparently led to a change in policy for 600,000 users.  The Washington Post's 
headline summed up the situation. "AOL Journals:  You've got ads."

But it isn't just AOL that's trying to make money from advertising. A rogue AOL 
employee sold 92 million AOL screen names to spammers, resulting in "up to 7 
billion" spam emails, according to the Associated Press.

CNN/Money - which is owned by AOL Time-Warner - reports that the AOL employee 
ultimately assembled a complete list of every AOL subscriber's screen name, zip 
code, phone number and type of credit card.  According to the Associated Press, 
that list "is believed to be still circulating among spammers."

AOL said they "deeply regretted" the incident.,1272,66518,00.html

Ironically, AOL's new installation procedure displays a full-screen ad touting 
AOL's role in "Helping you feel more safe and secure" by "blocking online 

It's not the first time AOL employees have been arrested.

And in 1997, one former AOL customer service staffer even described taking 
joy-rides on on the accounts of AOL celebrities, including Rosie O'Donnell, 
quarterback Troy Aikman, and Robin Quivers from the Howard Stern show.

In another incident, AOL hired an 18-year-old with a record of misdemeanor 
charges for using stolen credit cards, according to Wired News.  Within 90 days 
the staffer was reprimanded for "repeated misuse of confidential account 
information" - yet continued working at AOL for another year. "She baited 
celebrities into online conversations by using private information she had 
collected about them without their knowledge," Wired News reports - including 
Tom Hanks, Goldie Hawn, Carrie Fisher, Meg Ryan and a movie producer.

"She's essentially an electronic stalker," one privacy advocate complained.,1284,63147,00.html

But as AOL grapples with reduced staff and out-of-control employees, they 
apparently can't even provide users with reliable access to their own email. An 
AOL subscriber named Michael Franks discovered that AOL deletes their users' 
email after a certain period of time.  So Franks periodically forwarded all his 
emails to another of his AOL screen names.

For several months, as a way of working around AOL's shortcomings, he was 
forwarding as many as 400 emails - to himself.  "Somehow this triggered their 
system that I was 'bulk emailing'," he told AOL Watch - and last January, AOL 
canceled his account.

Franks was baffled.  ("I was not bulk emailing anyone...  I was just forwarding 
emails TO MYSELF!!")  When he explained the situation to AOL, they re-activated 
his account and flagged his screen name as being okay for large mailings.  But 
they also mistakenly removed his main screen name from that same list - without 
telling him.  By April, the same forwarding had triggered AOL's malfunctioning 
filters -- and AOL cancelled his account again!  "It's like a child's game of 
'Simon says'," Franks complained. "They said I was on a six month probation 
(that I knew nothing about) and [that] was my last chance.  And I'm permanently 

Who is Michael Franks?  "I'm on the board of directors of the Republican Party 
of Texas, and just got through running for the Texas Legislature." Among the 
people he emails are the governor of Texas, its state legislators, and the 
party county chairman.

After six years on AOL, "THOUSANDS of people across Texas have my email address 
for basic communication," Franks complains.  Yet his account has suddenly been 
de-activated.  It's a matter he'll be discussing with the Texas Attorney 
General - who happens to be a personal acquaintance - and "I've already 
contacted a few lawyers..."

He's lost access to hundreds of emails - including some involving a lawsuit. 
"I've called and called AOL... They keep giving me the run-around."  The 
account re-activation department refers him to AOL's "Community Action Team," 
who tells him they simply aren't able to re-activate an account that's been 
cancelled for bulk mailing. The phone representatives he talked to advised him 
his only recourse was sending a written letter to AOL's "Community Action 
Team." "It's like they have NO mechanism or method of helping someone in my 

Even AOL's employees have had similar problems. In 2001 Time-Warner had 
insisted all its employees use AOL's email software, according to the Wall 
Street Journal, but within a year the Time-Warner executives had found a 
lot to complain about. "[T]he email software frequently crashed, staffers 
weren't able to send messages with large attachments, they were often 
kicked offline without warning, and if they tried to send messages to 
large groups of users they were labeled as spammers and locked out of the 

According to the Journal, an internal memo AOL sent had warned Warner Brothers 
executives that 2% of their email was simply disappearing. Dissatisfied 
employees of AOL Time-Warner had to resort to communicating with FAXes or 
Federal Express, and at one point they'd reverted to simply printing an 
important email - and then delivering it in a taxi!

Within one year, AOL Time-Warner conceded defeat, and stopped requiring 
that their employees use AOL's email software.

AOL's irregular mail delivery has recurred over the years.  In 2002 AOL deleted 
hundreds of thousands of emails from Earthlink subscribers.  AOL even deleted 
emails that Harvard University had sent to tell students they'd been accepted 
to the college.

In the past AOL has also mistakenly stopped delivering email from various 
services including the Microsoft Network, FlexNet,,,, -- and even Google.  Earlier this month the Wall 
Street Journal reported that "Possibly millions of AOL members were 
temporarily unable to receive some mail from Google's Gmail users...after 
AOL held up messages from some new Gmail servers over concerns it might be 

AOL founder Steve Case said that spam was the #1 complaint from members - back 
in 1996.

But ten years later, AOL still hasn't found a way to address the problem. 
And malfunctioning spam filters online block as much as 20% of the 
legitimate emails sent to many users, a market researcher told the 
Journal.  And the same filters block emails between friends about once a 

Rather than correct the problem, AOL has apparently found a way to make money 
off it. Under a new policy, "affluent mass-emailers who are willing to pay AOL 
the equivalent of an 'email tax' would get to bypass AOL's spam filters," 
writes one activist site.

The cost of "accreditation"?  $400.

What happens to the rest of us?  "Everyone who can't afford to pay AOL's 
'email tax' - including charities, small businesses, civic organizations, 
and even families with mailing lists - will have no guarantee that their 
emails will be delivered," the activist warns. "AOL's pay-to-send system 
would actually reward AOL financially for degrading free email..."

Another critic joked to the L.A. Times that AOL's new policy resembles a mafia 
protection racket. "Nice e-mail newsletter you've got going. It would be a 
shame if it got hurt by getting caught in our filters...",1,1839518.story?coll=la-mininav-technology&ctrack=1&cset=true

Even paying hundreds of dollars doesn't guarantee the email gets 
delivered, says Danny O'Brien, activism coordinator for the Electronic 
Frontier Foundation. "That's just the non-refundable accreditation 
process." Amazingly, more than 75% of the people who pay hundreds of 
dollars to complete the "accreditation" process are rejected anyways.

And even after completing the process, additional fees are charged for 
every email sent.

Massive opposition quickly rose to AOL's scheme, with over 500 groups 
signalling their anger, including everyone from the AFL-CIO and the Electronic 
Freedom Foundation to Craig's List founder Craig Newmark and even Boy Scout 
Troop 64 of Princeton, New Jersey.

Their support was noted on the web site In a disturbing twist, AOL 
immediately began blocking any email containing its URL. "I forwarded to my own AOL account and it was censored," one user told the 
site.  "Apparently I can't even tell myself about it."

Reporters at C|Net and the L.A. Times confirmed that AOL was blocking any email 
with the site's address - raising the possibility of a world where AOL would 
pick and choose which emails they'd like to deliver. After media attention, AOL 
quickly reversed their policy, claiming that it had merely been the result of 
"a glitch."

With fury building, AOL apparently hoped they could implement their email 
discrimination without their members noticing. On May 5 AOL "flipped the 
switch on the sly," the EFF's activism coordinator noted, warning that AOL 
now can "rent out" your inbox without permission.

He labelled his post "AOL starts the shakedown."

How responsive would AOL's postmaster be to non-paying members? Earlier 
this month a test call to AOL's "Postmaster Help Desk" was left on hold 
for over an hour. (After an AOL recording warned that holding time would 
be "greater than 10 minutes" - and another announcing that "AOL is 
committed to delivering exceptional customer service!")

While AOL's web page promises emergency issues can be addressed "24 hours 
a day, 7 days a week," on Sunday May 14 AOL's recording simply asked 
complaining internet service providers to call back the next day, during 
"business hours." Ironically, this recording was preceded by a series of 
cheery but mis-matched introductions. ("Thank you for calling! For quality 
control purposes, this call may be recorded!  Thank you for holding while 
we connect your call...")

Now as AOL's new mail policy goes into effect, anyone sending email to AOL 
is at the mercy of their understaffed support lines - recently reduced by 
1,300 employees.  And they're also at the mercy of AOL's malfunctioning 
mail filters. Michael Franks warns that the end result is horribly 
ineffective. "They might as well have an answering machine pick up every 
call and say... 'Thanks for reaching our pre-recorded message. You are so 
foolish to think we are here to help you anyway. You are wrong...

"You're screwed, we don't care how we just affected your life, business, etc. 
Go to hell -- but thanks for using AOL."

Franks feels AOL is holding his business hostage, and he's already decided to 
transfer his professional contacts to a different service, because continuing 
to use AOL is too risky.  "I shouldn't have to have my heart racing and living 
in TERROR over this when I haven't done anything wrong."

There's a simple solution at 1-888-265-8008.  "If you're unhappy with your 
current providers' policy, you should switch ISPs," says Danny O'Brien, 
activism coordinator for the Electronic Frontier Foundation. When angry AOL 
users call to cancel their accounts, O'Brien has one final suggestion. "Let 
them know why you're leaving."

Even users who keep their AOL accounts can make a difference, according to 
the "Take Action" page at  "If you've got three minutes, call 
AOL's headquarters and tell them you don't want the email tax directly. 
Call 1-703 265 1000. Hit "0" to speak with an operator... Just let them 
know your concern, and thank them for their time."

But even non-AOL users could soon be facing the same problems. "Cable and 
telephone companies that provide Internet service are talking about 
creating a two-tiered Internet," warns the New York Times, "in which web 
sites that pay them large fees would get priority over everything else."

A web site quickly sprang up called Save the Internet, and today its director 
raised a question about the future. "[W]ill a handful of telephone and cable 
companies determine which Web sites you see and which you don't?"  The site 
warns that "AT&T and others want to take away your choices and control what you 
can do and watch online...

"[I]f their high-priced lobbyists get their way in Washington, the Internet as 
we know it will be gone."

The Times predicts "a disaster for users, who could find their web 
browsing influenced by whichever sites paid their service provider the 
most money." The "Save the Internet" site notes that online businesses are 
already paying $10 billion each year to fund internet access, but "the 
cable and phone companies want even more -- forcing content providers to 
pay protection money to get a spot in the fast lane."

The only winners would be the biggest companies - like Time-Warner's cable 
service - since they'd be able to demand that this extra money be extracted 
from the web business's consumers.  The "Save the Internet" site argues that 
web surfers would have no other choice. "[W]hen the network owners start 
abusing their control of the pipes, there's nowhere else for consumers to turn. 
The cable and telephone companies already dominate 98 percent of the broadband 

A call for "net neutrality" has begun from Senators in both political parties, 
and in March congressmen received a letter signed by dozens of concerned 
technology companies, including Google, Yahoo, Microsoft, Amazon, eBay, and 

Over 750,000 concerned web surfers have already signed an online petition.

But actions taken this month may determine the future of email and the web - 
possibly for decades to come.  Before it's too late, the "Save the Internet" 
site is urging users to make their voices heard.

Ultimately the way your internet connection is controlled can have very 
real consequences - as Michael Franks learned from his experience with 

"Someone shouldn't be AFRAID of their ISP," he says now, "and the POWER it has 
on your life."


Last year the AOL employee who sold 92 million email addresses to spammers 
discovered the judge in his case had been a former AOL user himself. His judge 
had cancelled his account because it had been receiving too much spam.

The judge sentenced him to 15 months in prison.

         David Cassel
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David Cassel
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