AT&T will stop exploiting a loophole that it used to deny a discounted home Internet service to poor people in areas where it hasn't upgraded its network.

AT&T's purchase of DirecTV came with a Federal Communications Commission requirement to offer Internet service for either $5 or $10 a month to households in the federal Supplemental Nutrition Assistance Program (SNAP). But AT&T was able to avoid making this discount price available to low-income people in areas where its network doesn't support download speeds of at least 3Mbps.

A broadband advocacy group called the National Digital Inclusion Alliance (NDIA) asked AT&T to reconsider recently, and AT&T denied the request. But AT&T changed its mind after the NDIA wrote a blog post that was widely shared by news media and fueled criticism of the carrier.

"We're currently working to expand the eligibility process of Access from AT&T to the 2 percent of our home Internet customers unable to receive Internet speed tiers of 3Mbps and above," AT&T told CNN Friday.

The service will cost $5 a month, and AT&T is working as quickly as possible to make it available, an AT&T spokesperson told Ars today.

AT&T has 15.6 million home Internet customers. Based on the 2-percent figure, about 312,000 are unable to get download speeds of at least 3Mbps. These are generally in areas with DSL service over copper phone lines. With copper networks, homes that are far away from the nearest DSLAM (digital subscriber line access multiplexer) can end up with access measured in kilobits per second rather than megabits.

The FCC required AT&T to offer 5Mbps or 10Mbps Internet service to low-income people for $10 per month. In areas where those speeds aren't available, AT&T must offer $5-per-month service of at least 3Mbps. The FCC is required to review whether mergers serve the public interest, and it can impose requirements that offset potential harms that mergers might cause customers.

But the merger requirement said AT&T only had to make the offer of discounted 3Mbps service "where technically available." Taking advantage of this exception, AT&T decided not to offer the discount in areas where its network is in the worst shape. Customers were thus stuck paying full price (at least $30 a month) for the slowest available speeds.

While AT&T said just 2 percent of its customers can't get at least 3Mbps speeds, the NDIA checked FCC data and found that the percentage is much higher in certain areas. In Cleveland and Detroit, the fastest AT&T download connection reported was 1.5Mbps or less in 21 percent of census blocks. These blocks were mostly in inner-city neighborhoods with many low-income residents.

The NDIA said that it is "gratified to learn that AT&T has reconsidered its earlier refusal."