AT&T to Sell Satellite Broadband to Rural Customers

AT&T Inc. (T) plans to expand its high-speed Internet offerings by selling satellite-based access to customers in rural areas who can't be reached by broadband over phone lines.

AT&T said Monday it is partnering with WildBlue Communications Inc. to sell satellite broadband under its own brand, starting this month in some areas.

AT&T plans to expand service later this year to all customers in its 13-state local service area who cannot get a digital subscriber line, or DSL. The company says nearly 20 percent of its 26 million residential customers are in that category.

WildBlue's service is considerably more expensive than DSL, starting at $50 a month for a download speed of 512 kilobits per second. For $80 a month, a customer can get a download speed of 1.5 megabits per second, comparable to the lowest tier of DSL service, which costs $13 a month for the first year of AT&T service.

WildBlue is a privately held company based in Greenwood Village, Colo. It uses a satellite operated by BCE Inc. (BCE), Canada's largest phone company. BCE is also a major owner of WildBlue.

In another initiative aimed at reaching rural homes, AT&T is deploying trials of fixed wireless links in Texas and Nevada, chief executive Ed Whitacre announced in a speech in Detroit.

The company already has been trying fixed wireless broadband in Alaska, Georgia and New Jersey.

One of the technologies mentioned by AT&T as part of the trials is WiMax, which is similar to the Wi-Fi technology that underlies Internet "hot spots," but offers greater range and speed.

Whitacre noted in his speech to the Detroit Economic Club that the United States is ranked 12th in broadband penetration.

"This is not right," Whitacre said. "It makes no sense that our country, which took the Internet out of the lab and into the living room, now lags so many others."

In a comment aimed at allaying fears that television services now being rolled out by telephone companies will be built only in affluent neighborhoods, Whitacre said AT&T's U-Verse video service will be available in 5.5 million low-income households within three years.

Groups like Consumers Union have said that state and national legislation that would make it easier for the phone companies to obtain franchises for video services could also make it easier for them to "redline" poor neighborhoods, where competition to incumbent cable providers is needed most.