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AT&T will raise its cable modem service rates by as much as 20 percent or $6 monthly starting June 1, the company has announced.

This is the first rate increase on cable modem services from AT&T Broadband, which has provided high-speed Internet access for about five years, according to Sarah Duisik, AT&T Broadband spokesperson. Currently, monthly rates are $39.95 for cable modem service and the lease of a modem, or $29.95 for only cable modem service.

"We think the new price best reflects the value of what we are offering," Duisik says. The service is always on and provides the best "bits-per-buck," she said.

Customers are being notified now of the rate hike, Duisik says. For customers who lease a modem, the $6 hike represents a 15 percent annual increase, to $45.95. Subscribers of the high-speed data service only will see a 20 percent increase, to $35.95.

Subscriptions Doubled

According to its most recent figures, AT&T Broadband has 1.28 million customers for high-speed data service, with the largest percentage of them in major metropolitan areas like San Francisco, Denver, Atlanta, and Boston.

In January, AT&T Broadband said it had added 2.3 million subscriptions of its high-speed cable modem service, digital television, and phone service during 2000. AT&T Broadband ended 2000 with approximately 4.4 million subscriptions to its services, says Steve Lang, an AT&T Broadband spokesperson.

The company in 2001 is seeking to grow its subscription base by more than 2.8 million subscriptions, with some wiggle room for customer turnover, he adds.