It's perhaps unsurprising that shares of value ISP United Online (NASDAQ:UNTD) are about flat with the level they set in mid-October following news that Time Warner's (NYSE:TWX) AOL would start a deep-discount dial-up service in 2004 for the Netscape browser. United Online offers discount Internet access services through its BlueLight, NetZero, and Juno brands.

Even news that would ordinarily be well-received by investors -- including a stock-split marketing pact with Best Buy (NYSE:BBY) and an upbeat fiscal Q1 earnings report -- hasn't helped restore the shares' go-go climb through most of 2003. In short, it looks increasingly like investors are keeping the shares in a "holding pattern" until it's clear how AOL's new entrant will stir up the marketplace.

In a Washington Postarticle today, David Vise takes a good look at United Online, its CEO Mark Goldston, and the competitive situation surrounding the service provider. The company faces stiff pressure from EarthLink (NASDAQ:ELNK), cable and telephone companies, as well as high-speed and dial-up connections.

What the article can't do is tell us how this whole story will shake out. For United Online, the story remains the same: The fierce battle on the low end for no-frills dial-up subscribers will rage on -- and even intensify as Netscape joins a market AOL already operates in via a Compuserve and Wal-Mart (NYSE:WMT) partnership. (Accelerated dial-up services like United Online's add flavor to this stew.)

The fight for growth and market share in the high-speed space, meanwhile, will continue to be the big story in the sector. But if you believe Goldston's contention that AOL can't overmarket another cut-price service because of cannibalization concerns, it may follow that United Online is being unfairly penalized for potential near-term changes to its competitive position.

Will United Online succumb to its competitors? Talk about the company's outlook on our United Online discussion board.

Dave Marino-Nachison can be reached at dmarnach@fool.com.