By Josh Long
Posted on: 09/11/2003

AT&T Corp. on Thursday introduced high-speed Internet service to consumers in four states along the East Coast as part of its nationwide strategy to bundle local and long-distance phone service and broadband access.

AT&T, the No. 1 long-distance company, has introduced broadband service to consumers in New Jersey, Massachusetts, Maryland and Virginia. In July AT&T unveiled DSL in New York.

Adding broadband service to the consumer package is part of AT&T's strategy to develop a full arsenal to battle its long-distance rivals, MCI and Sprint Corp., and the four regional Bell operating companies.

Revenue in AT&T's consumer services unit has shrunk by billions of dollars over the last few years due to wireless substitution and stiff competition from the Bells among other reasons.

AT&T said today it plans to ultimately offer broadband service in all the states where the Bedminster, N.J.-based company provides consumers bundled local and long-distance phone service. On Monday AT&T announced plans to expand local residential phone service to 35 states by the end of the year, up from 13 states as of now.

AT&T does not own a consumer broadband network, but it has partnered with Covad Communications Co. to provide DSL through a so-called line splitting arrangement. Under the agreement, AT&T leases the entire phone loop from the Bell company, such as Verizon Communications Inc. in New York, and shares the line with Covad to provide phone service and DSL. The arrangement is limited because AT&T cannot lease the entire loop from Verizon unless a customer buys local phone service from AT&T.

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