The plan by AOL Chief Executive Jonathan Miller calls for AOL to stop charging fees to people who already have high-speed Internet service or dial-up service from another provider, the Wall Street Journal said, citing people familiar with the matter. People with AOL's dial-up service would continue to pay their monthly fees of as much as $25.90, the paper says, adding that one-third of AOL's 18.6 million customers already have high-speed access. It would knock down what remains of the so-called walled garden that once separated AOL from the rest of the Internet. An AOL spokesperson couldn't immediately be reached for comment.
AOL's plans jibe with its strategy of transforming itself into a portal like Yahoo! (YHOO - Get Report) or Microsoft's (MSFT - Get Report) MSN. The company has been taking content that had only been available to subscribers and putting in on its free AOL.com site.
Last year, Time Warner sold Google (GOOG) a 5% stake in AOL for $1 billion to help it grab a bigger portion of online advertising dollars. AOL also is hoping that its early move into Internet video will help attract visitors.Despite these moves, AOL remains a weakness for New York-based Time Warner. Investor Carl Icahn called for a spinning off AOL during his recent attempt to boost the company's ailing stock price. Still, AOL's dial-up customers are continuing to flee for faster Internet access in droves. During the first quarter, AOL and publishing were the only Time Warner units to show a decline in operating income. Improving AOL now is particularly important for Time Warner's President Jeffrey Bewkes, who is seen as a possible successor to Chief Executive Richard Parsons. Shares of Time Warner, whose other holdings include Warner Bros. and CNN, rose 4 cents to $17.17