America Online has raised the hackles of more than a dozen state regulators concerned that the company's overhauled pricing scheme is forcing its customers to pay for services they haven't ordered.
To compete with ISPs, AOL said last month it would start offering unlimited Internet access for US$19.95 a month beginning 1 December. The company plans to arbitrarily switch users who now pay $9.95 a month for their first five hours over to the $19.95 flat fee unless the customers speak up, a move that would effectively double the bills of many users. AOL is notifying customers of the switch in online forums. Regulators are questioning whether that's enough for AOL to stay inside many states' consumer protection laws.
AOL disclosed the news in an SEC filing Friday that said the states' attorneys general may file suits against the company. While it blithely predicts AOL would prevail over any lawsuit, the filing adds that "a negative outcome with respect to such suits could have a material adverse effect on business."
AOL is already responding to questions from the Federal Trade Commission and state regulators about other business practices at the service, including its policies on direct withdrawals from its users' bank accounts, and its advertising disclosure rules, Bloomberg Personal said.
