AOL Time Warner Considering Internet Rate Hike

On the heels of its giant merger, AOL Time Warner is considering hiking its flat subscription rate to America Online by $2 a month to $23.95, analysts said. Officials at AOL, which serves about 27 million Internet users in the U.S., declined to comment. “I think it’s disturbing that they may be considering a rate hike so soon after the close of the merger,” said Jeff Chester, executive director at the Center for Media Education, a consumer group that opposed the merger. AOL’s last rate hike was in 1998, and it became the priciest U.S. Internet service provider. Internet analyst Henry Blodget estimated that a $2-a-month hike, beginning in the second quarter, would boost operating profit by about $358 million this year and $542 million in 2002. Shares rose 4 cents to close at $53.84 on the NYSE.