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NetZero to Start Charging For Internet Access

For the first time, Netzero Inc. -- the self-proclaimed "Defenders of the Free World" -- plans to charge patrons of its Internet access service but only those users that exceed a threshold of 40 hours online in a single calendar month.

In an effort to reign in costs associated with what it calls "professional users," NetZero Inc. Thursday introduced a new service plan dubbed "NetZero Professional."

The company said the new policy will affect a small percentage of its user base, noting that in November 2000 only about 12 percent of NetZero members who used its free Internet access service surpassed the 40 hour mark. However, the company said that 12 percent of users accounted for more than 50 percent of its telecommunications costs in November.

"Our introduction of the NetZero Professional service is designed to help balance the load between the typical recreational consumer and the heavy user," said Mark R. Goldston, chairman and chief executive officer of NetZero. "A very small group of NetZero members -- who we have designated 'professional users' -- account for an inordinately large percentage of our overall telecommunications costs. This new service plan is intended to enable us to continue to provide unlimited Internet access to these professional users without impacting our ability to provide the same high-quality, free Internet access to the other NetZero members who are online with us less than 40 hours per month."

The new service plan only takes effect when a user exceeds 40 hours in a month. At that point, the user will have an option to pay $9.95 for unlimited usage for the remainder of the month. Users who opt not to pay the fee will not have their accounts terminated, but they will have to wait until the beginning of the next month before utilizing NetZero's free Internet access again. Users who pay the fee will not necessarily have to pay it in subsequent months. Only in months that they exceed the 40 hours per month threshold will they have to pay to continue accessing the Internet through NetZero.

The new service plan will take effect in January 2001.