Competitive Rates

A week after America Online said it was raising rates for unlimited monthly Internet access, Microsoft Corp.’s MSN Internet division has launched a $50-million campaign aimed at getting AOL users to switch to Microsoft’s service.

Microsoft said it will offer three months of free Internet access to people who switch by June 30. The company also will guarantee that monthly fees will remain at $21.95 for unlimited access through January 2003.

AOL, the market leader with about 29 million subscribers, recently said it was raising monthly rates for unlimited Internet access by $1.95, to $23.90, beginning in July.

Analysts have said that AOL’s decision to increase prices probably would cause few defections but could mean hundreds of millions of dollars in revenue for parent company AOL Time Warner Inc.