AT&T offers unbundled DSL as part of FCC deal

Journal Record, The (Oklahoma City), Jun 21, 2006 by Janice Francis-Smith

AT&T didn't make much fuss last week when the company began offering DSL service independent of its other bundled services. But then, the savings provided by unbundling DSL isn't much to write home about: losing your landline would save $1 a month.

The Federal Communications Commission ordered the company to begin offering stand-alone DSL (digital subscriber line) service as one of a handful of conditions that allowed for the merger of SBC Communications and AT&T in October 2005. While SBC had only offered DSL service as part of a bundle of communications services, the newly merged company, known as AT&T, is required to offer naked DSL for 30 months.

Like the other conditions the FCC required in order to approve the merger - including AT&T's promise not to block Internet traffic from accessing Voice Over Internet Protocol (VoIP) and to abide by the FCC's network neutrality rules - the requirement that AT&T offer naked DSL was intended to encourage competition. Providing DSL without corresponding landline telephone service presumably would make it more cost-effective for consumers to make calls using VoIP technology.

But AT&T is offering stand-alone DSL for $44.99 a month. As part of the bundle, AT&T charges $29.99 a month for DSL, but subscribers are also required to purchase telephone service in a package that totals about $46 a month. While some may thus have expected stand- alone DSL to be about $15 a month cheaper than the bundle, AT&T spokesman Andy Morgan said it's not unusual for stand-alone services to cost more than they would as part of a bundle.

It's the strategy of most telecommunications companies to get their customers to subscribe to as many services as possible, Morgan said. It's advantageous for the customer to buy the bundle. Anything by itself is going to be a higher price than it would be taking the bundle - Customers have told us over and over they like the bundle, they like the convenience of getting all their services on one bill.

The $44.99 charge for stand-alone DSL is still very competitive with the price cable companies are charging for high-speed Internet, Morgan said.

AT&T is planning to do some promotion of the stand-alone DSL in the near future, targeting the service to Cingular wireless telephone customers who have already abandoned landline service but still want high-speed Internet, Morgan said.