Consumers cry foul over AOL, CompuServe deal

Wall Street may be in love with the America Online Inc. acquisition of CompuServe Inc.

Wall Street may be in love with the America Online Inc. acquisition of CompuServe Inc.'s user base, but subscribers of both services are expressing serious reservations about the plan.

"I don't think this is good news for the consumer," said former AOL user Werner Bruhin, who recently dropped AOL in favor of the No. 3 commercial online service, The Microsoft Network. "There are now only two large providers, which over time will probably kill many of the local ISPs [Internet service providers] and won't make it easy for anyone else to become a worldwide player."

The sheer size of the new entity could pressure MSN to beef up content offerings and improve service, Bruhin said in an interview. AOL will gain CompuServe's 2.6 million U.S. users and 850,000 European users, and possibly some or all of CompuServe's 2 million other international subscribers and affiliates.

AOL users fear both price increases and a return of the service's infamous busy signals.

"AOL has trouble serving the 9 million members it already has," said AOL member Darrell Glendenning. "One-third more are certainly not going to help matters much." Intermittent E-mail delays could also be worsened by the added network traffic, he said in an interview.

Glendenning, who said he connects to AOL through the @Home Network with a cable modem, said he often faces connection delays, and doesn't anticipate that AOL's new partnership with WorldCom Inc. will have much impact. (Under the terms of the deal, the AOL network backbone will get a boost from the WorldCom network.)

"There are times when I just get dropped for no apparent reason, and there are times that I can't even log in to begin with," Glendenning said. "WorldCom and UUNet and every other backbone in the country aren't going to help these problems."

One user who subscribes to both CompuServe and AOL also frowned on the deal.

"I don't like the AOL-swallows-Compuserve deal at all," said Don Fry, an international newspaper consultant based in St. Petersburg, Fla. "World travelers depend on Compuserve's universal connections, whereas AOL's just don't work well abroad. Compuserve customers have everything to lose, and nothing to gain,"

CompuServe members were even more skeptical.

CompuServe subscriber Daniel J. McCoy said that as soon as he heard the news of the impending AOL takeover, he canceled his account.

"I won't be part of AOL's subscription base. Their overpriced, over-hyped, under-powered services aren't want I want and I refuse to pay for them," McCoy said in an E-mail message to ZDNN.

Karoli Kuns, a CompuServe subscriber writing in a newsgroup posting, said he was "sorry to see this happen" and that "despite assurances that AOL and CompuServe will remain separate services, I believe the service and content of CompuServe will be compromised."

"Also, I do think it can have an impact on pricing, because they now have the backbone that they need to raise rates," Kuns added in his posting. "Internet access through ISPs is notoriously inconsistent and often unreliable, while CompuServe's backbone has been strong enough to accommodate the needs of its users. With AOL piggy-backing onto that backbone, my sense is that there will be an attempt to raise rates."

Former CompuServe user Mimi Kahn wrote on another newsgroup that the takeover "may cause a lot of CompuServe subscribers to run screaming for the exits."

"I can't think of two less compatible groups than the AOL morons and the CompuServe subscribers," Kahn wrote. "Also, note how much more control over the Internet backbone WorldCom gets from this deal. They already own UUNet. This makes them downright scary."

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