AT&T To Cut DSL Prices To New Low; Plan Costs $12.99 A Month; Price cut could be a blow to cable firms, which have seen broadband sales slow.(INTERNET & TECHNOLOGY)

Byline: REINHARDT KRAUSE

AT&T is slashing its monthly fee for high-speed Internet access to an all-time low: $12.99.

The telecom company had been charging $14.95 a month for its lowest-priced digital subscriber line plan. The new deal, which goes into effect Friday, is aimed at customers who sign up online. It requires a one-year contract.

The price cut could mean more trouble for AT&T's cable industry rivals, which have been losing market share to DSL. Cable services still comprise the majority -- 57% -- of the broadband market. But cable firms haven't been as aggressive about cutting prices, analysts say.

Comcast, the biggest cable firm in the U.S., reported Thursday that it added only 378,000 Internet customers in the fourth quarter. That's a 16% smaller increase in the year-earlier period.

"This ($12.99 offer) will have a negative impact on cable TV companies, who don't seem to be reacting yet," said Jeffrey Kagan, an Atlanta-based telecom analyst.

AT&T has focused on the low end of the broadband market with its cheap DSL plans. The new $12.99 plan -- like the $14.95 plan before it -- offers a slower service than pricier plans. But it's still seen as an improvement over dial-up services, and AT&T is aggressively trying to convert dial-up users to DSL.