AT&T Offers U-Verse Video, Net Service
Jun 26 3:31 PM US/Eastern
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By BRUCE MEYERSON
AP Business Writer


NEW YORK


AT&T Inc. on Monday expanded its gradual foray into cable TV, offering its U-verse video and high-speed Internet service to about 5,000 homes in San Antonio.

The long-anticipated service, originally slated for a full-scale launch starting in late 2005, is the focal point of AT&T's bid to transform itself into a multimedia provider of communications beyond phone calls.

The initial packages are priced from $69 to $124 per month, depending on the choice of premium channels and Internet connection speeds. The selection includes more than 200 channels of video and music programming, while computer download speeds range from 1.5 megabits per second to 6 Mbps.

AT&T also is offering family-oriented bundles starting at $54 a month, as well as a premium Spanish-language package for an extra $10 per month after a promotional three-month discount.

The services come with three TV receivers per home, including one with a digital video recorder, and a wireless Internet router. The introductory installation fee is $20, down from $95.

Though the initial U-verse offering is largely analogous to traditional cable television, AT&T is deploying it with an Internet- based technology that can meld video, phone, Internet and wireless communications to deliver interactive features. This technology would, for example, enable a customer to see caller ID on a television set or program a digital video recorder from a cell phone.

But because the hardware and software for "IPTV," which stands for Internet protocol TV, are relatively unproven, AT&T has moved more cautiously than initially planned to minimize the chance of any embarrassing glitch that might leave subscribers without TV or online access for hours or longer.

Notably, the 5,000 homes being offered the service in San Antonio are spread across the city rather than a single neighborhood, suggesting that AT&T is trying to ensure that the network is ready for a market- wide launch.

By contrast, Verizon Communications Inc. has been deploying its new Fios TV using traditional cable technologies, which has enabled it to launch the service in dozens of markets. On the downside, Verizon's approach to upgrading its network is far more costly than AT&T's gambit on a more cost-efficient IPTV strategy.

AT&T now plans to have U-verse available in 15 to 20 markets by year's end, though no date has been disclosed yet for a full-blown launch in San Antonio or any other city. Houston is the only other market beyond San Antonio to be announced.

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