As ISPs Shift Their Business Models, MindSpring's Got Access Pricing on the Brain

SAN FRANCISCO -- Internet service provider MindSpring (MSPG Quote) may be feeling pressure to rethink its pricing policy.

Suddenly many companies offering Internet access are cutting the price of getting connected to the Net. On Tuesday, Qwest (QWST Quote) said it would bundle free Net access with long-distance calls. NetZero, a Westlake Village, Calif.-based ISP set to go public next month, offers free service and depends only on ad revenues to bankroll its largesse. Even, the cash-rich software monopoly Microsoft (MSFT Quote) is threatening to axe rates, perhaps to zero, for its MSN service.

Free service will be the norm in North America in six to 12 months, according to Christopher Jenkins, president of ISP ZipLink (ZIPL Quote) of Lowell, Mass. It's already a phenomenon in the U.K.

Then there is MindSpring, still a member of the old school. Since its founding in early 1994, Atlanta-based MindSpring has mushroomed to 1.2 million subscribers via acquisitions and its reputation for reliable service. In the second quarter ended June, MindSpring earned $7.5 million, excluding tax-affected amortization charges, while revenue grew 242% to $85.7 million from $25.1 million. ...