AT&T to offer 'naked' DSL for far less than before
Consumer representatives wonder if the service will be too slow to attract customers

Ryan Kim, Chronicle Staff Writer

Tuesday, January 16, 2007

See original article from the Chronicle here

After rolling out a form of stand-alone DSL service last year that offered customers nominal savings, AT&T is set to try it again with a new, unbundled broadband plan that will provide customers with a relatively affordable alternative for high-speed Internet service.

Customers will soon be able to pay $19.95 per month for broadband service without having a phone line from AT&T. Or, customers can pay $10 a month for DSL service when it is bundled with a phone plan, which start at about $15 per month with taxes and surcharges.

The change means AT&T customers can separate their broadband access bill from their phone bill, if they so choose. For instance, if customers choose the "naked" DSL option from the phone giant, they can either rely on their cell phones entirely and save some on their phone bills or they can try out other home Internet phone services, like Vonage or Skype.

The new prices, which go into effect sometime in the next 12 months, reflect an agreement AT&T struck with the Federal Communications Commission, which made the price cuts a condition of AT&T's merger with BellSouth when the deal was approved Dec. 29. When the service begins, the pricing will remain for 30 months.

The naked DSL offer will provide download speeds of up to 768 Kbps, the slowest tier of DSL. Upload speeds will be half that.

"We said all along the merger between AT&T and BellSouth would result in consumer benefits and this is an example of that," said AT&T spokesman John Britton.

AT&T began offering DSL last year to satisfy conditions of its 2005 merger with SBC. But while AT&T was required to offer unbundled service for two years, the FCC did not set pricing guidelines.

So in June, AT&T began offering unbundled, 1.5-Mbps DSL service for $45, which was practically the same price as a bundle of DSL and phone service.

Consumer advocates are ambivalent about AT&T's naked DSL commitment.

Michael Shames, executive director of the Utility Consumers' Action Network, said he's pleased that AT&T is finally offering an affordable version of stand-alone DSL. But he said the speed AT&T is offering will make it difficult to do heavy media downloading and will make it hard to achieve high-quality Internet phone service performance.

"I think it's a mixed bag," Shames said. "There are a lot of consumers that are moving to (Internet telephone service), but I don't think they'll be satisfied at those speeds."

Mindy Spatt, spokeswoman for The Utility Reform Network, said that with the lower tier of service, it seems like AT&T is trying to steer people to faster speeds, which are still better priced when purchased in a bundle.

"Certainly it's hard to imagine there will be a huge rush of consumers; for many of customers, it's like going backward in time to a slower connection," Spatt said. "The bottom line is AT&T wants to sell you a bundle. Even with this merger condition, that's still their goal."