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AOL Offers Low-Cost Internet Service

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From Reuters

Time Warner Inc.’s America Online unit has launched a preliminary version of a lower-priced Internet service it can pitch to subscribers who call to drop the flagship service for a cheaper rival.

The modem dial-up service, which debuted this month under AOL’s Netscape brand, will cost $1 a month until the end of February. It will cost subscribers $9.95 a month beginning in March, compared with $23.95 for the full-fledged AOL service.

The new service is a stripped-down and lower-cost version of AOL’s flagship service, minus extras such as original programming and high-speed Internet music videos.

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AOL is offering a cheaper alternative after watching millions of subscribers flee to lower-cost rivals such as the Juno and NetZero services owned by United Online Inc.

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