As a condition of the AT&T and SBC merger, California regulators required that AT&T offer California consumers "naked DSL," or DSL without force-bundled local phone service. Except, when released last June, AT&T actually charged customers more in some markets for the stand-alone DSL service than it cost to get DSL bundled with local phone service. AT&T at the time said setting that price "is a way to let customers know that buying several services at the same time is always the best value."

Six months later and the Sacramento Bee is annoyed, noting that naked 1.5Mbps DSL there is $50 (after fees), while a local phone and DSL bundle costs $40. "This is not a disincentive," an AT&T rep tells tells the Bee. "We have always been committed to delivering a choice of services." The paper notes that it's not just AT&T:

"The company isn't alone in charging higher rates for naked service. In Sacramento, Comcast charges $43 for its 6-megabit Internet connection when purchased along with cable TV service. Without cable, it's $57 a month. SureWest Communications in Roseville charges about $14 a month more for naked DSL than it does when the connections are bundled with regular phone service."

It's a matter of perspective: Are the lower prices an effort to reward bundling, or an effort to punish customers for refusing to bundle?