Less than a week after a similar deal with EarthLink collapsed, Microworkz has signed an agreement to bundle AT&T's Internet service with its bargain basement $199 iToaster PC.

Sources say the deal calls for Microworkz to pay AT&T $300 million.

Under the plan, customers can either pay for the computer and get 150 hours of free monthly Internet access, or pay $19.95 a month for Internet service for two years and get the PC for free.

The Pasadena, Calif.-based ISP EarthLink cancelled a similar deal that bundled free Internet service with Microworkz's $299 WEBzter PC after Microworkz announced it was scrapping the stripped-down PC for the even less expensive, bare-bones iToaster model. The two companies are now suing each other over the deal's collapse.

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