The attached letter is being sent to all PC Pursuit customers via US Mail and constitutes 30 days notification of a change to the PC Pursuit Terms and Conditions. Please leave all comments regarding this notification to Peter Naleszkiewicz in the "prod" message area here on the Net Exchange. You can also send US Mail to Peter at: Telenet Attn: Marketing (PC Pursuit) Peter Naleszkiewicz 12490 Sunrise Vally Dr Reston, VA 22096 or call at: 1-800-835-3638 (ask for him or for his superior) -------------------------------------------------------------------- NOTIFICATION OF PRICE CHANGE for PC PURSUIT Dear PC Pursuit customer: The PC Pursuit service is in the midst of dramatic change. Three major programs were instituted in 1988, including: o Outdial City Expansion. Nine new cities were added for a total of 34. Additionally, all the cities now support 300, 1200, and 2400 bps service. o Increased Capacity. All existing outdial rotaries were significantly expanded to support more callers in each city. o New Netline Exchange. The old 4 line PC-based Netline Exchange bulletin board system was recently replaced with a powerful minicomputer. The Netline Exchange is available 24 hours a day at no charge to you and is the place to leave all of your service questions and comments. When PC Pursuit was launched over three years ago, it was viewed as a way for residential consumers and hobbyists to take advantage of off-peak network time at a bargain price. The growth and varied use that followed far exceeded expectations. To satisfy demand and to continue to offer this unique consumer oriented communications service on as wide a basis as possible, we now have to change our prices. The change will provide for continued expansion and other future improvements of PC Pursuit. Included with this letter is a copy of the new PC Pursuit terms and conditions, as well as the new pricing details. You will notice that for the average residential consumer, the change is entirely in the monthly charge. For those who use PC Pursuit at increasingly professional levels, we offer two tiers of hourly charges which still provide for the best value in the industry. Here is a summary of the price change: o Monthly Charge. The new fixed charge is $30 per month. o Cap on Free Usage. Your $30 per month will now pay for up to 30 monthly hours of non-prime time usage. Using the full 30 hours in one month amounts to an hourly rate of only $1.00 -- more than 85% less than you would pay with the most popular long distance discount service. Only a small fraction of you will even be affected by this cap. o Over Cap Rate. Non-prime time usage, above the 30 hour cap, will be billed at $4.50 per hour, which is about half of the next lowest rate in the market place. o Second Tier Rates. There will be a second level of rates for those who use the service at business levels. When your total monthly usage exceeds 60 hours, both prime time and non-prime time rates will increase for those hours in excess of 60, as follows: PRIME TIME 2nd tier rate: $ 14.00 /hr Non-Prime 2nd tier rate: $ 7.50 /hr These rates are still significantly less expensive than the most popular alternatives. THESE PRICE CHANGES WITH THE NEW TERMS AND CONDITIONS WILL BECOME EFFECTIVE ON FEBRUARY 1, 1989. In addition to the price change, several other significant events will occur in 1989, including: o Rotary Consolidation. Today, you must specify both a city and speed to access an outdial rotary. In 1989 new network software will be deployed to combine each city's rotaries into one, resulting in easier use and increased service quality. o New Billing System. Scheduled for operation by the second quarter, the new system will automatically collect all charges from your credit card, including flat rate and hourly charges. If your bill exceeds the fixed monthly fee, you will receive a statement prior to incurring charges. o Additional Payment Methods. In addition to American Express, VISA, and Master Card credit cards, the new billing system will support two new payment methods - - The Discover credit card. - Direct checking account debiting via Checkfree. o New Outdial Service. In the next few months, we will be launching a new business outdial service. Details will follow. There will be many other Outdial service enhancements in 1989. We look forward to this exciting new year, and the improvements it will bring. The input and support of our many thousands of satisfied customers has helped shape the future of the PC Pursuit Service. For this, we extend our deepest thanks. You have helped make PC Pursuit the best end-user data communications value in the industry. Sincerely, Peter Naleszkiewicz Outdial Services Product Manager