EarthLink's Push Leaves AOL in Low-Cost Vise

Watch out, America Online. EarthLink's (ELNK Quote) thriftiness shows signs that pricing pressure in the dial-up Internet business is getting stronger.

EarthLink, the nation's largest independent Internet service provider, said Wednesday that it was moving forward with the rollout of a discount ISP brand. News and details about the debut, which will be built on the PeoplePC business that EarthLink bought last year, came a day after EarthLink announced it was cutting costs by laying off 1,300 employees, or about one-quarter of its workforce.

The moves, which came as EarthLink released fourth-quarter financial results and forecast further cost-cutting for 2003, illustrate how the subscriber base for AOL Time Warner's (AOL Quote) America Online service continues to be nibbled at from above and below -- from low-cost alternatives such as United Online (UNTD Quote) and from high-speed Internet services offered by cable TV companies. AOL Time Warner, whose Internet service has been suffering from slowing subscriber growth and plummeting ad sales, is slated to report fourth-quarter earnings after the markets close Wednesday. ...