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2/6/2008
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AT&T Increases Broadband Prices, Extends Reach Of 3G Wireless Network

Most consumers in AT&T's service area will see $5 jumps in their monthly rates for DSL service.

AT&T may be sending a signal that the era of relentless price cuts for broadband is coming to an end. The nation's largest telecommunications company is raising prices for its DSL broadband data services, despite strong competition from cable companies.

Most consumers in AT&T's service area will see $5 jumps in their monthly rates. For instance Basic 768 Kbps service will rise from $14.99 to $19.95, Express 1.5 Mbps service from $19.99 to $25, and Pro 3 Mbps service from $24.99 to $30.

Subscribers living in the former BellSouth region aren't facing increases. When AT&T acquired BellSouth in 2006, the FCC extracted a promise from the company that it would offer 768 Kbps service in the BellSouth states for $10 a month. AT&T hasn't publicized the rock-bottom deal widely, and consumers generally have had to ferret out the offering on their own.

At the same time, AT&T announced that it will extend its 3G wireless offerings this year. The company said its deployment of 1,500 new cell sites will enable it to deliver 3G broadband service to all of the top 100 U.S. cities by the end of the year. AT&T said it expects to complete its high-speed uplink packet access (HSUPA) network by mid-year, which will boost its wireless delivery offerings.

"We're also planning for the future by establishing a clear path to a 4G network that will meet the needs of our customers for years go come," said Ralph de la Vega, president and CEO of AT&T's wireless unit, in a statement. Earlier this week, the company received approval of its $2.5 billion acquisition of a large block of 700 MHz spectrum from Aloha Partners.

Faced with increased competition from cable companies, AT&T has been fine-tuning its broadband portfolio of offerings. Last month the company began offering its existing customers free Wi-Fi in various locations including McDonald's restaurants, Barnes & Noble bookstores, and airport and coffee shop hotspots.

AT&T said there will be no price change for customers who have its DSL 768 Kbps service.

AT&T and other telecom providers often use a technique called "harvesting," whereby consumers are sold basic services and then are gradually charged more for future upgraded services.

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