AT&T to raise broadband cable rates

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By James Evans

(IDG) -- AT&T Corp. will raise its cable modem service rates by as much as 20 percent or $6 a month starting June 1, the company said Tuesday.

This is the first rate increase on cable modem services from AT&T Broadband, which has provided high-speed Internet access for about five years, AT&T Broadband spokeswoman Sarah Duisik said. Currently, the rates are $39.95 for cable modem service and the lease of a modem or $29.95 for only cable modem service.

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"We think the new price best reflects the value of what we are offering," Duisik said. The service is always on and provides the best "bits-per-buck," she said.

Customers will be notified on Tuesday of the rate hike, Duisik said. For customers who lease a modem, the $6 hike represents a 15 percent annual increase, to $45.95, while subscribers of the high-speed data service only will see a 20 percent increase, to $35.95.

According to its most recent figures, AT&T Broadband has 1.28 million customers for high-speed data service, with the largest percentage of them in major metropolitan areas like San Francisco, Denver, Atlanta and Boston.

In January, AT&T Broadband said it had added 2.3 million subscriptions of its high-speed cable modem service, digital television and phone service during 2000. AT&T Broadband ended 2000 with approximately 4.4 million subscriptions to its services, AT&T Broadband spokesman Steve Lang said.

The company in 2001 is seeking to grow its subscription base by more than 2.8 million subscriptions with some wiggle room for customer turnover, he said.

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