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AT&T teams with Covad to offer broadband

The carrier partners with Covad and starts selling broadband access in New York state, the first of several markets nationwide in which it intends to sell high-speed Web service.

AT&T began offering broadband access in New York state on Monday, the first of several markets nationwide in which the telephone company intends to sell high-speed Web access.

The standard DSL (digital subscriber line) service, with speeds of 384kbps, debuts at a price of $20 per month for the first three months and $40 per month afterward. AT&T is also selling a "preferred" service with a 1.5mbps connection that costs $50 a month. The company is offering that service at a discount of $20 per month for the first three months.

The carrier intends to eventually offer DSL to homes and businesses in the areas where it sells long-distance and local telephone service. An AT&T representative had no additional comment on the rollout schedule.

AT&T is partnering with Covad Communications to supply the access, the representative said. Financial details were not disclosed.

Telephone companies have made broadband access part of their bundles of services for several years, making AT&T a little late to the game. Its chief competitor in New York is Verizon Communications, which sells broadband for about $35 a month or $30 a month if bought with Verizon's local and long-distance telephone service.

AT&T's partnership with Covad marks the latest entry into the telecommunications industry's season of subscription price cuts for DSL service. Hungry for new subscribers, companies such as Verizon and SBC Communications have cut prices and struck co-marketing deals with Web portals in hopes of luring new households to their high-speed service bundles.

So far, the discounts have netted mixed results. SBC last week announced 304,000 new DSL subscribers to its co-branded service with Yahoo, surpassing most estimates and surprising Wall Street. Verizon, however, said Tuesday that it added a mere 101,000 DSL subscribers, which disappointed the Street.

The rush to add new broadband subscribers is a defensive move by the Baby Bells to prevent cable companies from stealing customers. Cable companies such as Comcast and Time Warner Cable now bundle video with broadband Internet and voice calling. Cable far exceeds DSL in signing up households to high-speed access, giving companies a foothold into up-selling voice services.