The $12.99 price is for download speeds up to 1.5 megabits per second. The carrier is also offering a higher-speed service for $17.99, which provides download speeds from 1.5mbps to 3mbps. The promotion is only for new subscribers, and the cutthroat pricing lasts only a year. After that, the monthly charge jumps to $29.99 for the lower-speed service and $34.99 for the higher-speed service.
But the new deal comes with a couple of catches. It only applies to customers who order the service online, and it also requires people to subscribe to one of the company's local phone service plans, which start around $10 per month.
AT&T and Verizon Communications haveover the year to lure customers away from dial-up access onto their broadband services. Last summer, AT&T (then SBC Communications) was the first of the two large phone companies to --to $14.99 for the first year of service. Verizon followed a few months later with a offering 768kbps downloads for $14.95 per month.
The price-cutting strategy has worked well for the phone companies, as they have each racked upin the months following the new promotions.
Meanwhile, cable operators have resisted national price cuts on their service. Instead, these companies continue to compete on speed. They also, which include high-speed Internet access, telephony and television.
The phone companies are slowly assembling their own service bundle to compete with the cable operators. Verizon is using its, to offer its TV service, which is already up and running in several communities in Texas, Florida and Virginia.
AT&T, which is using a combination of fiber andto increase broadband speeds, is . It plans to roll out the service more widely later in the year.
Cable operators have responded to the phone companies' threats with some limited price cuts or, especially in areas where Verizon's Fios competes.