AT&T; to Offer Net, Phone Pricing Plan

AT&T; Corp., the biggest U.S. long-distance telephone and cable television provider, said Monday it will begin offering residential customers combined Internet access and phone service for a $7 monthly fee.

The service, called AT&T; 7/7, will give consumers unlimited access to the Web and a round-the-clock rate of 7 cents a minute on state-to-state long-distance calls from home, AT&T; said.

In exchange for the cut-rate Internet access, customers will have to use software that displays small advertisements on their computer screens while they’re online.

The offer provides more online time for almost $3 less per month than AT&T;’s previous product line, and is significantly less expensive than package deals that aren’t subsidized by advertising. But consumers willing to shop for separate deals can find advertiser-supported Internet access for free and long-distance service with lower monthly fees.

AT&T; and other phone companies were slow to embrace the Internet and have struggled to attract customers to their online services.

AT&T; last week said WorldNet had more than 1.4 million residential customers at the end of 2000, down 3.8% from 1999. By comparison, AOL Time Warner Inc.’s America Online service had 26.7 million customers at the end of last year.

WorldCom, the nation’s second-largest long-distance company, said in May that it would market America Online service to WorldCom customers. Terms of the exclusive, multiyear alliance weren’t disclosed. WorldCom had less than 1 million residential Internet users at the time.

Sprint Corp., the No. 3 long-distance company that owns 27% of Internet service provider EarthLink Inc., in September began selling packages of 1,000 evening long-distance minutes and unlimited Internet access for $30 a month. Sprint offers other combination plans for $19.95 to $50 a month.

AT&T;’s Internet-access plan includes six e-mail addresses, personal Web-page space and a navigation bar with targeted advertising.

The bar is the same one used in AT&T;’s ad-subsidized i495 service, which offers 150 hours of online time for $4.95 a month and helped AT&T; add 100,000 new WorldNet customers in January, an AT&T; spokesman said.

Shares of New York-based AT&T; rose 72 cents to close at $24.10, and Westwood, Kan.-based Sprint fell 2 cents to close at $23.49, both on the New York Stock Exchange. WorldCom, based in Clinton, Miss., gained $1.31 to close at $21.38 on Nasdaq.