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Technology Stocks : COM21 (CMTO) -- Ignore unavailable to you. Want to Upgrade?

To: pat mudge who wrote (1531)	1/19/2000 12:54:00 PM
From: zbyslaw owczarczyk	Read Replies (1) \| Respond to of 2347

AT&T cuts price on cable Net access for those who buy own modems BY JON HEALEY Mercury News Staff Writer AT&T Corp. has quietly cut the price of high-speed Internet access in some parts of the Bay Area, offering AT&T@Home service for mercurycenter.com just under $30 per month to customers who buy their own modems. The move means that, for the first time, Bay Area consumers can obtain a high-speed connection for less than the cost of a second phone line and an America Online account. It also increases the price-cutting pressure on Pacific Bell and other suppliers of high-speed ''digital subscriber line'' service over phone lines. Those price cuts may be on their way, as new technology and regulations help to reduce the cost of providing DSL service. Upstart Internet service providers are also starting to promise free DSL lines for consumers willing to view targeted advertisements, although no such service has been delivered. AT&T's service, offered through affiliate Excite@Home of Redwood City, provides an always-on connection to the Internet through the cable TV wires. Although it can download data 30 or more times faster than the speediest dial-up modem, the speed delivered at any given moment depends on how many users are sharing the cable and Excite@Home pipelines. The usual price for the service has been about $40 per month, with no charge for the modem or, in many cases, the installation. The consumer-oriented DSL service has sold for $49 to $59 per month, with one-time charges in some cases of $198 to $280. AT&T started offering the $30-per-month rate in late November to customers who bought a standards-compliant RCA cable modem, which Circuit City stores in Mountain View and San Mateo sell for $249. Those modems can be used only in the 13 communities where the @Home service complies with those standards, including Santa Clara, Saratoga, Milpitas, Cupertino, Mountain View, Los Gatos, Los Altos and Redwood City. Spokesman Andrew Johnson said consumers who buy their own modems also can avoid installation charges. A separate AT&T promotion offers free installation and monthly fees of just under $20 for the first three months of service. When it adds up The $10-per-month discount for consumers who buy their own modems makes sense only for those who keep the service for more than 24 months. There's also a risk that new modems will come along before then, offering more attractive services. In fact, the cable industry is developing standards for a new generation of modem that can support multiple local phone lines in addition to Internet connections. AT&T also is exploring devices that will combine a cable modem with home-networking technology, a cable TV converter box, or both. Still, Johnson said, AT&T's goal is to give all its customers the option of buying their modems, meaning that the $30-per-month price will spread throughout the Bay Area once standards-compliant equipment is in place. AT&T's main competitor for high-speed home Internet connections has been Pacific Bell, which charges customers who sign a one-year contract $49 per month plus $198 for the DSL modem. Shawn Dainas, a spokesman for Pac Bell, said his company believes DSL is still a better deal than AT&T's service, even at $19 more per month. Connection speed The main reason, Dainas said, is that the connection speed of DSL won't vary as more users go online. DSL connections are eight to 28 times as fast as a dial-up link, depending on how far the user is from the nearest phone company central office. Distance is DSL's Achilles heel, limiting the number of homes it can reach. Users who are more than 3.3 miles away from the central office typically can't get the high-speed service, and are limited to a version of DSL that's less than three times the speed of a dial-up modem. The advantage to DSL is that, unlike cable, users have a dedicated line from their house to the central office. That distinction ends at the central office, however, because users have to share the connections to their Internet provider, Web sites, news groups and e-mail servers. Dainas said he couldn't say whether Pac Bell would lower its prices to compete with AT&T. In general, though, the price DSL service is expected to drop as regulations force Pac Bell and GTE Corp. to give other DSL providers access to their phone lines at significantly lower rates, and as new technology cuts the price of installation and equipment. The cost of dial-up Internet connections varies. A second phone line costs about $15 per month. America Online charges $21.95 per month for unlimited access, but it offers other plans and Internet access can be purchased for less than that from other providers.