You can do this.
Thanks to fellow MVP, winston, for the following detailed reply elsewhere in this forum to a similar question:
To cancel a fee based MSN Premium or MSN Dial-Up account and convert the email address to a free Hotmail account contact MSN Support to cancel your service.
MSN Dial-Up Internet Access Technical Support
(800) 386-5550
Hours of operation:
Monday - Sunday 24 hours each day
MSN Premium Internet Software Technical Support
(800) 494-2962
Hours of operation:
Monday - Sunday 24 hours each day
Hearing Impaired using a TDD device
(800) 877-9580
Hours of operation:
Monday - Friday 0500-2200 PST / Saturday - Sunday 0500-1700 PST
Cancellation of your service will revert your email address to a free Hotmail account without a change in your actual email address. Since your email address will not change, the need to notify contacts/senders is not necessary.
- Note: If you cancel/revert your account to a free account you will no longer be able to use MSn Premium software (MSN Explorer).
Once converted...to access your free account you can use your browser by logging on with your username/password in the web interface (http://mail.live.com/ or http://hotmail.com/) or setup your free account in Windows Live Mail (a free desktop email client from Microsoft http://explore.live.com/windows-live-essentials
You also have the option (if you wish to continue using MSN Premium Software) to convert your account to a lower cost MSN plan with your broadband service (i.e. a BYO ISP plan normally. $9.95/month))
http://get.msn.com/PlanDetails.aspx
To do so, contact MSN Support at the appropriate phone number for your current plan (phone #'s above)