America Online is in process of testing a flat-rate/month VoIP service, utilizing Level3’s network as it seeks to help stem the increasing customer defection. The service will launch in 2005.

As broadband connections in the United States continue to rise, the need for predominantly dial-up ISPs, such as AOL diminishes. I am assuming that AOL will attempt to provide “dial-up VoIP” so they can offer a competitive price-point that will put a tourniquet on the customer blood letting. I’m not holding my breath. While there are still millions of people on dial-up, I just don’t see “dial-up VoIP” succeeding for very long. Dial-up is the past and broadband is the present and the future. Not only that, but do you know who is predominantly using dial-up? The less technically savvy people - like my father who uses his dial-up Internet connection to check email, surf the Web, and trade stocks. He doesn’t download or stream music, play videos, use P2P software, or utilize any other bandwidth heavy Internet applications - and AOL wants to target him as a VoIP dial-up user? I don’t think so.

The only people potentially to use “dial-up VoIP” are teenagers and young adults. But guess what. Teenagers are the BIGGEST users of streaming music and videos, downloading music and using P2P software, so if they are currently on dial-up, no doubt they will push their parents HARD to upgrade their Internet connection to a fast broadband connection, which negates the need for dial-up VoIP.

I should point out that AOL still has 23 million subscribers, 4 million of whom have broadband hookups. So perhaps AOL isn’t going after "dial-up VoIP" after all? Maybe they will only offer a flat-rate VoIP package plan just for their broadband subscribers? That does make more sense to me. Maybe if AOL makes dial-up VoIP so simple it will make sense for a certain “niche”, but again, I’m not holding my breath.