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February 24, 1999


By CBR Staff Writer

In Gateway Inc’s other major internet announcement yesterday, it plans to offer buyers of new PCs a year’s free internet access as of tomorrow, February 26, provided the cost of the machine is greater than $1,000. Existing users will still be charged for the service. Gateway is swallowing the cost and says the price of the PCs will not increase as a result. It says it has not yet determined how much users will have to pay if they want to maintain the access after the first year. The access is through MCI WorldCom’s UUNet subsidiary, which took over the operation after Gateway dumped and sued Web America Networks Inc in mid-January for what it claims were poor levels of services. Gateway has offered bundled net access in its PCs since the fall of 1997. Web America countersued Gateway and won a temporary restraining order preventing UUNet from taking over and then promptly had that turned over by a Texas court, leaving UUNet with the job of providing access (01/26/99). Gateway says about 97 to 98 percent of the issues surrounding that case have now been resolved and its technical support lines have quieted down a lot in the past two weeks.

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