Quietly, AT&T Discounts DSL to Meet Merger Demands

Companies usually like to promote their best deals.

Not so with AT&T, which over the weekend started offering high-speed Internet service for about half its normal price in some states. The $10-a-month-deal, which was not advertised on the airwaves or on AT&T's corporate Web site, was part of a deal AT&T struck with regulators in exchange for approval of its $85 billion merger with BellSouth.

The discounted plan is to be offered for at least 30 months and requires a one-year contract and local phone service. With basic phone service included, the monthly cost totals about $25.

To win approval for its merger late last year, AT&T agreed to several conditions, bowing to pressure from some members of the Federal Communications Commission who wanted safeguards for consumers.

The deal is available to customers in the 22 states served by AT&T who have never had AT&T or BellSouth high-speed Internet service, said spokesman Michael Coe. The service is not offered in Maryland, Virginia or the District.

"We felt like the merger should go through without any conditions," he said. "But to show additional consumer benefits, we voluntarily decided to add them."

Coe said he could not comment on possible advertising for the deal, which was introduced Saturday, because plans were not final.

Consumer-advocacy groups said bigger benefits await consumers in six months, when AT&T plans to offer "naked" DSL service, which allows consumers to get high-speed Internet service without also paying for local phone service.

"While this is a nice low price for people who don't have broadband, it locks you into other services that might not be the lowest price across the board," Gene Kimmelman, a vice president of Consumers Union, said of the $10 offer.