In its first such deal, the country's biggest phone company said it planned to build a Wi-Fi network for Springfield to offer a free, ad-sponsored service of limited speed of 250-260 kilobits per second as well a paid service with a faster speed of up to around 1 megabit per second.

The Wi-Fi network could also be used to support municipal government operations, AT&T said. Other details, as well as city council approval, were still pending.

Eric Shepcaro, senior vice president of business development at AT&T, said he expected more such deals.

"There are up to a dozen cities that we're actively pursuing," he said in an interview.

He said the company was aiming for cities "where it makes economic sense."

FCC questions Verizon, BellSouth Internet fee
Verizon Communications and BellSouth will be asked by U.S. regulators to explain a new fee on high-speed Internet customers that replaces a government surcharge that ended this month, a source familiar with the matter said Friday.

Verizon and BellSouth, the No. 2 and No. 3 telephone carriers respectively, will be sent "letters of inquiry" to see whether the new charge complies with Federal Communications Commission rules that require "truth in billing," the source said on the condition of anonymity.

The companies no longer have to pay a part of their high-speed Internet revenue into the Universal Service Fund (USF), which subsidizes communications services to schools, lower-income households and rural areas, as of Aug. 14.

They had passed that USF cost onto their customers. An FCC decision a year ago phased out the USF fee for the telephone companies' high-speed Internet service.

However, Verizon said it would impose a new monthly surcharge of $1.20 or $2.70, beginning Aug. 26, which it said was to help subsidize connection costs. BellSouth said it has continued charging $2.97 a month, equivalent to the old USF fee.

Verizon had charged DSL (digital subscriber line) Internet customers a monthly fee of $1.25 or $2.83 to cover the USF contribution, depending on connection speeds.

AT&T, the largest U.S. telephone company, was not expected to receive a letter from the FCC, the source said. Letters of inquiry are typically the first step in an agency investigation into whether enforcement action is warranted.

A spokeswoman for the FCC declined to comment. Verizon spokesman Brian Blevins declined to comment, while a BellSouth spokesman had no immediate comment.

AT&T has agreed to buy BellSouth and needs the FCC to approve the transaction.

Smaller ISPs say Comcast and AT&T maintain huge databases of email servers that send out spam, so they can stop spam messages from reaching their users' mailboxes. Problem is, their system for adding a server to the "blacklist" is a mystery and often marks non-offending servers as spammers.

Once an ISP's email servers get added to a blacklist, none of its customers can send email to any of Comcast's 9 million or AT&T's 7.4 million subscribers.

Jon Newell, president and CEO of local internet provider IPNS, says one of his 22 employees must watch the blacklists every day, at a cost of thousands of dollars annually. He says it often can take months to get off the list. All the while, Newell's non-spamming customers complain that they can't send emails to their clients.

And Ken Perkin, tech support manager at another local ISP, Sterling Communications, says his company had recently gotten off the AT&T blacklist, only to learn it got added again to that list last week.

Perkin and Newell both agree that spam is a problem (who doesn't?), but they say big ISPs' response is overboard because their smaller, managed networks can prevent huge spam bombardments from originating on their servers.

AT&T didn't return WW's calls, but Comcast spokeswoman Theressa Davis says Comcast has reduced spam by 70 percent since ratcheting up its spam-blocking last year.

"This isn't really for competitive reasons," Davis says."This is about fighting spam for everyone on the Internet."

But Newell says the effect is to encroach unfairly on his business.

"If you're Comcast and you want some of my 4,000 domains," Newell says, "this is a good way to get 'em."

No price cuts for Verizon, BellSouth DSL customers
Verizon Communications' and BellSouth's DSL customers won't see a reduction in their broadband bills, even though a special fee that had been tacked on to bills to pay for a federal program has been eliminated.

Last year, the Federal Communications Commission changed how it classifies DSL (digital subscriber line) services, thus eliminating a fee that had been charged to all DSL subscribers to help pay into the Universal Service Fund. USF is a federal program that helps subsidize rural telephone service and provide Internet access to schools and libraries.

Verizon DSL customers subscribing to its 768Kbps (kilobits per second) service paid about $1.25 into USF every month, and customers of its 3Mbps (megabits per second) service paid about $2.83 per month, the company said. BellSouth customers were charged $2.97 per month for USF, according to the BellSouth Web site.

But now that the fee has been eliminated, as of Aug. 14, neither Verizon nor BellSouth plan to pass the savings on to consumers. Instead, Verizon has added a new "supplier surcharge" starting Aug. 26 that's $1.20 per month for the slower service and $2.70 for the faster service. BellSouth said it will keep its $2.97 fee, which it continues to call a "regulatory cost recovery fee."

Verizon said it is charging its new supplier surcharge to offset the cost of offering its standalone, or "naked," DSL service, which allows customers to subscribe to DSL without subscribing to Verizon's local phone service.

The company said that because it's losing revenue from those voice subscriptions, it must make up the difference in other ways. But instead of simply recovering those costs in the price of the actual service, Verizon has chosen to spread the cost of naked DSL across its entire DSL customer base.

Customers subscribing to standalone DSL pay $5 more per month for their broadband service than customers who buy DSL bundled with a voice service.