AT&T intends to make broadband DSL service available for just $5 a month to some low-income households as a condition of its merger with DirecTV.
But that offer, revealed in a recent filing with the Federal Communications Commission, comes with some catches. Subscribers will receive speeds of just 1.5 Mbps -- far below the Federal Communications Commission's current definition of broadband as 25 Mbps. In addition, the $5 monthly fee will only last for 12 months, after which it will double to $10 a month. That plan will only be available in areas where AT&T offers DSL service at top speeds below 5 Mbps.
The company is also promising to offer some low-income households a faster DSL service of 5 Mbps for $10 a month. That price will last for 12 months, after which it will increase to $20 a month. That offering only is available to people living in areas where AT&T already offers DSL that is faster than 3 Mbps.
Both of those low-income deals will only be available to households that are both eligible for food stamps and located within the company's wireline DSL footprint. AT&T also is only promising to honor those deals for four years.
The advocacy group Public Knowledge recently floated a proposal that AT&T offer low-cost Internet connections without considering subscribers' financial circumstances.
“A low-cost connectivity option that was not means tested and was simply available for any customer who wants it could, under some circumstances, be a public interest benefit,” Public Knowledge said in a recent FCC filing. “This plan would be a benefit to cost-conscious or low-needs users -- for example, to people who simply may not be home very often. Such a plan could also appeal to those users who do not yet see the value of in-home broadband.”
The group adds that this type of offering could benefit AT&T, because some people “would later upgrade to a more comprehensive plan.”
Regulators at the Department of Justice are expected to approve AT&T's $49 billion merger with DirecTV without imposing any conditions. But some observers expect the Federal Communications Commission to seek commitments from AT&T regarding broadband service -- including a promise to follow net neutrality rules -- before signing off on the deal.