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.

"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.

The strategy appears to be working. The company, formerly named SBC Communications, added 1.8 million high-speed Internet customers in 2005. That's the most among phone and cable TV companies.

The company added 425,000 DSL customers in the fourth quarter alone. Three-quarters of them opted for the $14.95-a-month plan.

Verizon Communications which once criticized AT&T for slashing DSL prices too quickly, has been following AT&T's lead. That company added 613,000 broadband customers in the fourth quarter. Fifty percent of them signed up for its lowest-cost offer, also $14.95.