In an attempt to weed out its heavy Internet users, Juno Online Services has started charging some of its customers $29.99 a month for the amount of time they spend on the Internet.
That’s a price hike of $15, much higher than the norm in the ISP industry, even for bandwidth gluttons at rival services like AOL Time Warner, a bellweather for subscriber charges at $21.95.
It’s a policy you won’t find anywhere in Juno’s advertisements or Web site, and one that took many of its long-time customers by surprise.
Juno models its subscriber base on a free-to-pay service. Many free users, when deciding to upgrade to premium services, are likely to stick with Juno, a plan that made them the fourth largest ISP in the U.S., with approximately 4 million registered users.
Greg Kawell has been a premium Juno subscriber for several years, paying the $14.95 monthly fee for what he always thought was unlimited time online. In November, 2000, he tallied 180 hours as he kept abreast of the presidential elections and the ensuing media storm.
That was enough to warrant an email by Charles Ardai, Juno president and chief executive officer, who informed Kawell that because of his heavy Internet usage, he would be paying $29.99 a month to stay with Juno, starting in March.
What’s more, individuals flagged as heavy users are stuck at the $29.99 price level for the rest of the time they’re with Juno, even if they never again reach that level of use, even if they only use the service for five hours a month thereafter.
According to Gary Baker, Juno spokesperson, the policy only affects one-half of one percent of Juno’s billable user base.
“We have sent out notification to a very, very small fraction of subscribers that we are going to increase our price for their service,” Baker said. “You’re talking, in every case, about billable customers which were unprofitable at the price point we had established.”
Baker also pointed out the policy is defined in its service agreement, section 5.4 to be exact. At any time, Juno can change the fees it charges customers, it states.
In the email sent in February, Ardai said that all Juno “heavy” users will be levied the extra $15 per month for online use above and beyond the average time spent on the Internet. And what defines “heavy” customer use?
For a while, not many people knew.
“I called (in February) and the first customer service rep I talked to told me that I would have to email (Ardai) if I had any questions on this price hike,” Kawell said. “She stated that is what they were told to tell everyone who was calling in about this change. I asked her if many people were calling, she confirmed there were and that she herself did not understand why this was being done.”
He was then forwarded to a manager, who told him if he didn’t like the policy, he was welcome to cancel, and volunteered to transfer Kawell to the cancellation operator several times, he said.
Baker said the formula that determines a “heavy” Juno user is a mixture of actual time spent online, the POP users are calling from, and the time of day users call into the POP.
Heavy users are then tabulated by POP, a process that is sure to upset many users in small towns. For example, a user in Biloxi, MS, that’s on the Internet for 50 hours is just as much a bandwidth hog in the eyes of Juno auditors as the user in Los Angeles, who is on for 120 hours, because each is the top user in its POP.
The policy bears some resemblance to the steps taken by Juno last year to curb the Web surfing appetites of its heavy free Internet users. Officials said then that five percent of its free customers were responsible for 50 percent of the bandwidth consumed.
To bring those bandwidth hogs to Juno’s billable services, officials prioritized service based on the amount of time an individual was online. Heavy users were given lower priority when signing and staying on, incentive for them to upgrade. That policy, Baker said, attributed to a spike in premium upgrades the next month.
What has Kawell stumped, however, is the company’s refusal to budge on pricing and work on an alternative payment plan, after his many attempts to stay with Juno.
“The other stumper in this is that they only gave me two choices of what to do, either pay the extra $10 a month or cancel.” Kawell said. “For a company whose stock has dropped to below $2 a share and who states that over one third of its revenue is from paying customers, I found this to be down right amazing.”
Kawell has since moved to another ISP.
