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America Online Inc., a company that ushered nearly 8 million Americans into cyberspace, agreed Wednesday to give millions of dollars worth of credits and refunds as compensation for the network traffic jams that had been frustrating its customers since December.
The humbling announcement by America Online came in response to threats of lawsuits by dozens of states and an angry outcry from many subscribers, who often have received nothing but busy signals lately when trying to get onto the dial-up service.
The congestion began early last month after America Online, in an ambitious bid for further growth, started to charge customers a flat $19.95 monthly fee for unlimited use. Previously the company had charged a much lower fee but began billing by the hour after the customer exceeded a monthly limit, five hours, in most cases.
Until Wednesday, America Online had sought to address the consumer complaints by announcing plans to expand the capacity of its network and then, under mounting pressure, to consider credits or refunds on a case by case basis. But on Wednesday America Online worked out the following pact with 36 states to apply nation wide. In general, the agreement calls for AOL to issue refunds or credit toward future service, whichever the customer chooses, to cover network problems during December and January. Under the agreement, customers can receive credits for a free month of service or qualify for cash rebates of as much as $39.90.
Refunds will be given to customers enrolled in the service during December and January.
Customers connected for less than 2 hours will get $19.95 refunds for each affected month. Customers who used less than eight hours will receive 50 percent refunds. Customers with more than eight hours usage but less than 15 will receive 25 percent refunds. Customers who were on line more than 15 hours will receive no refunds.
AOL will suspend most advertising in February while it attempts to expand its capacity.
Future AOL advertising must "clearly and conspicuously" state that customers may encounter delays.
AOL will make it easier for customers to cancel service, either by fax or mail.
Refunds can be requested by calling AOL at 1-800-827-6364
Customers may request one month's free service in lieu payment by writing to AOL at P.O. Box 511, Odgen, Utah 84402-0511
Customers seeking to cancel may fax AOL at 1-801-622-7469