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AT&T launches $10 DSL it hopes no one signs up for

AT&T has quietly begun offering DSL service for $10 per month for new customers. Offered as part of the concessions the telecom made to the Federal Communications Commission in order to gain approval for its merger with BellSouth, the speed is nothing to get excited about: 768Kbps down and 128Kbps up.

AT&T is also doing little to publicize the new offering. In fact, I was only able to discover any reference to the low-price service by clicking on the Terms and Conditions link at he bottom of AT&T's residential high-speed Internet product page. A note on AT&T Yahoo! High-Speed Internet buried six paragraphs down says that the "basic speed ($10.00)" tier is available to new customers only, those who have not subscribed to AT&T or BellSouth DSL during the past 12 months, and the service requires a one-year contract.

Customers must also order phone service to get the budget-priced DSL service; those looking for cheap, naked DSL should look elsewhere. Those living in BellSouth's former territory can get naked DSL for the next two-and-a-half years, however.

Along with the budget high-speed Internet and naked DSL, AT&T also promised to maintain a "neutral network and neutral routing in its wireline broadband Internet access service" while also giving up its rights to the 2.5GHz spectrum. (WiMAX provider Clearwire recently completed the purchase of AT&T's unused 2.5GHz holdings.) In addition, AT&T must offer broadband to 100 percent of all residential living units in its territory, with 85 percent of that delivered by wire.

As is the case with the naked DSL offering, AT&T is only required to offer the $10 per month tier for the next two-and-a-half years. After that, the company is free to make whatever changes it wants to the service.

It's only $5 cheaper than AT&T's current lowest-priced service, but at $10 per month, the service could appeal to budget-minded consumers—especially those who are paying about that amount for dial-up service. More importantly for AT&T, it gives the company another platform from which to pitch its U-Verse broadband and IPTV service. After two-and-a-half years of 768Kbps service, U-Verse may look very attractive to lower-tier customers.