AT&T Corp [T] yesterday apologized for prematurely informing customers that it intended to implement a white-list policy on att.com that would block email from all but trusted business partners.

AT&T said that it, along with a number of other large companies have seen a marked increase in the amount of incoming SPAM.

The company’s problems follow similar issues in Australia and Canada, which have near-crippled the email systems of BigPond and Sympatico, the consumer ISPs run by the countries’ respective incumbent carriers, Telstra and Bell Canada.

Telstra has offered to give its Internet subscribers a two-week rebate and a three month trial of security software – at an estimated cost of $18 million – after its email systems were brought to its knees by virus-related spam.

It said the delays were caused by a sudden and sustained 25% in email traffic, caused by emails sent from computers outside the BigPond network that had been infected with the Swen virus.

Swen, according to anti-virus companies, spreads via email or peer-to-peer file sharing networks, masquerading as a Microsoft security update. Once installed on a machine, it can be remotely activated to turn the host into an open email relay, for use by spammers.

The same problem hit Sympatico. The firm has seen its outgoing email double since several prolific virus attacks in August. The ISP says it is contacting its infected users individually to get them to repair their machines.

It’s often said that spam, left unchecked, has the potential to make email unusable – to kill the Internet’s killer app – but up until recently the problem has caused the most noticeable degradation on desktops of end users, not the networks of mature ISPs.

This article was based on material originally published by ComputerWire.