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AT&T boosts DSL speeds, adds new services

Strikes deals with partners to offer new features, such as video downloads and voice calling, to put extra bandwidth to use.

AT&T has increased the speed of its broadband service and has struck deals with Starz Entertainment to offer a new video download service and with Yahoo to offer Internet telephony.

On Wednesday, AT&T announced a faster DSL (digital subscriber line) service that boosts downstream speeds to between 3mbps (megabits per second) and 6mbps and upstream speeds to between 384kbps (kilobits per second) and 768kbps for $27.99 per month for customers who sign up online for a 12-month contract.

AT&T currently offers two slower tiers of service. New customers who sign a one-year contract can get 1.5mbps downloads and 384kbps uploads for $12.99 and 3mbps downloads and 416kbps uploads for $17.99.

The new, faster-speed service is geared toward customers who want to do more than check e-mail and surf the Web. It's designed for downloading movies, playing interactive online games, or sending large files such as photos and video clips, the company said.

AT&T also announced that it will be offering consumers co-branded services with partners Starz Entertainment Group and Yahoo.

AT&T's faster service and new partnerships come as the company faces increased competition from cable operators, which are adding voice to their package of services. To fight this competition, AT&T is upgrading its network to deliver a TV service based on Internet Protocol. But in the meantime, the company is trying to differentiate its existing services by adding new applications.

Through its partnership with Starz, AT&T will offer a video download service called Vongo, which allows consumers to download movies and other video content over the Internet and play it back on any Windows-based PC, laptop or portable media devices, as well as on TVs. The service costs $9.99 and offers subscribers unlimited access to more than 1,500 movies and video selections as well as the Starz TV channel. Pay-per-view titles are available for $3.99 per movie. Subscribers will be allowed to download video onto three devices, allowing for multiple viewing options.

Starz launched the Vongo service back in January and currently offers it directly to any broadband customer on its Web site. Now AT&T subscribers can also sign up for the service on the AT&T and Starz co-branded Web site or from the AT&T Worldnet portal. AT&T said it is not charging Starz a special fee to deliver the video service to its customers, which should help ease concerns from Net neutrality supporters.

AT&T also sells a TV service called Homezone, a cross between a satellite TV service and IPTV, that offers consumers a set-top box that gets satellite TV programming from Dish Network and connects to a digital subscriber line to offer Internet-based services from providers such as Akimbo. In parts of its territory where AT&T's Project Lightspeed network is being built, consumers will eventually be able to subscribe to an IPTV service called U-verse.

AT&T also said Wednesday that it has expanded its relationship with Yahoo by offering its DSL customers Yahoo's new instant-messenger service with voice. This will allow consumers to make free PC-to-PC phone calls and inexpensive calls from their PC to regular phones.

Calls within the U.S. and to more than 30 other countries can be made for 2 cents a minute or less, according to Yahoo. U.S. consumers can also pay $2.99 a month or $29.90 a year to use the Phone In feature, which allows people to receive calls on their PC from traditional and mobile phones.