San Francisco Superior Court Judge James Robertson II, gave preliminary approval to the settlement, which is subject to final court approval after a public hearing.

Seidman's Online Insider opposes the proposed class action settlement.

While the problem with the 15 seconds likely affects less than one-third of AOL's users, AOL still got off pretty easy. Why? Because they STILL add 15 seconds to each login for network connection time and it doesn't take nearly 15 seconds for anyone connecting faster than 2,400 Kbps. The settlement does not require them to change this practice and I have a problem with that. If you're actually online for 46 seconds, you'll be billed for 2 minutes. This is because AOL adds 15 seconds and then rounds up to the next minute. If my "network connection time" actually took 4 seconds, and I was on for 46 seconds, it would add the 4 seconds to bring it up to 50 seconds and then round me up to 1 minute. I could live with that. But it adds 15 seconds and I wind up racking up two minutes of time when I actually used less than one minute of service. Fifteen seconds is too much time to add for those accessing at speeds of 9,600 Kbps and above.

Last week I spoke with AOL CEO and chairman Steve Case about these issues. Case suggested that the issue wasn't the practice of adding 15 seconds itself, but that the information wasn't disclosed properly (it is now.)

"The mistake a year ago was not making clear what we were doing and why we were doing it," Case said.

I suggested to Case that it wasn't a problem to bill for the network connect time if AOL could bill for it accurately. Case said that they couldn't bill for actual time, so they estimate. The more I thought on this, the less I liked it. First of all, I don't buy into the estimate. If they estimated five seconds for 9,600 and 14.4, and two seconds for 28.8 and added no time for TCP/IP connections (where AOL doesn*t pay time charges for the network connection), I'd be OK with them adding 15 seconds to those accessing via 2,400 Kbps. It seems to me those who exceed the five hours that come with the monthly subscription and are accessing at speeds faster than 2400 Kbps are getting hosed. If AOL can't bill for actual time or estimate fairly based on access speed, it ought to write it off as a cost of doing business.

Based on hourly access charges of $2.95, the suit could add up to a retail value of about $22 million, according to attorneys for the plaintiffs. But it won't cost AOL nearly that much. If it gives away almost 6 million hours away (and insiders are claiming that the U.S.-based AOL service still has not exceeded 6 million subscribers), two out of three people won't use it. For the 2 million or so who might, the actual cost to AOL would be more like $1 million to $2 million based on actual network charges ranging from 50 cents to 1 per hour. Thankfully for AOL, nearly all of its subscribers have come aboard in the past 2 years. Pulling billing records beyond that to calculate how many increments of $300 somebody has earned is probably going to be a nightmare (and you can be sure that it will only be giving it to those people who ask for it). Those who are no longer members, but who were members between the said dates can also apply for a cash award of $2.95 for each $300 of service used. Interestingly, according to The Washington Post, (which is now on the Web with a great site at: ) in an article at: America Online has only tagged $500,000 of funds for former customers applying for the $2.95 awards.

Boardwatch magazine opposes the proposed settlement
Early analysis of the proposed settlement

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