AOL to close 'free' ISP

Users of the 'free' Netscape Online ISP will be forced to move to a subscription model when AOL pulls the plug

AOL UK has announced the closure of its pay-as-you go Internet Service Provider (ISP) Netscape Online, in order to focus on its more successful flat-rate service. The move is likely to affect people who use the Internet infrequently, for whom flat-rate services can work out more expensive.

Netscape Online was to be AOL's big foray into "free" Internet access in the UK, and was pitched against similar services such as that offered by FreeServe. But now the company has decided to phase out its subscription-free ISP, following a growing UK preference for unmetered services. The Netscape portal and browser will be unaffected.

"We looked carefully at where the market is going, and decided that flat-rate is the future, whereas "free" is dying away," said Matt Peacock, director of corporate communications at AOL UK. "The days of the Netscape Online business model are numbered, whereas the AOL flat-rate ISP is growing at a phenomenal rate."

No end date has been set for Netscape Online, but AOL has promised that existing subscribers will be supported for several months to come. "We will not be pulling the plug immediately...we will not leave Netscape Online customers in the lurch," said Peacock. AOL is currently exploring a number of unmetered access products to offer as an alternative.

AOL refused to confirm the number of Netscape Online customers that will be affected, but Peacock suggested that the service was "a very credible top ten free UK ISP".

Fifty AOL staff -- 30 in London, and 20 in Dublin-- have been told that their jobs could be lost as a result of the announcement. A 30-day consultation period is being held with the affected employees in the Netscape Online, CompuServe and technology teams, before a final decision is made. It is hoped that some staff will be moved across to work on the AOL ISP.

See the Internet News Section for full coverage.

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