AT&T: IPTV Software Slowed Rollout

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AT&T blamed the slower-than-expected rollout of its U-verse TV service in part on the need to “make enhancements” to the IPTV software provided by Microsoft.

AT&T confirmed last week that it would offer U-verse TV in 11 metro areas by the end of 2006 -- four shy of the goal it set in October. Earlier in the year, AT&T had been even more optimistic, telling Wall Street it expected to launch in 15-20 markets.

Asked why it missed the 15-market goal, AT&T responded in a statement last Thursday: “We revised the number of markets to make enhancements to our IPTV software and other systems based on some key learnings in our initial markets … We want to ensure that we’re doing everything possible to meet and exceed customers’ expectations.”

AT&T spokesman Brad Mays would not disclose details of what “enhancements” were required.

The telco is using Microsoft’s IPTV Edition software to provide key functions for U-verse TV, including an interactive program guide, video-on-demand, digital-video-recording services and HD video.

Microsoft spokesman Jim Brady said the company would not comment on AT&T’s specific launch plans.

SBC Communications, which acquired AT&T and assumed its name, began working with Microsoft on the IPTV project in 2004. The companies at the time said the deal would be worth more than $400 million over 10 years. SBC originally planned to launch commercial service in “late 2005,” but U-verse TV first became available in June 2006 in San Antonio.

Meanwhile, Verizon Communications, which is using a different version of Microsoft’s TV-platform software, took over more of the development work for its set-top-box software after it became “frustrated with delays and technical glitches with Microsoft’s technology,” according to a report in The Wall Street Journal in September.

Microsoft said Verizon always had a stated strategy for “extensive” in-house development of its set-top software.

AT&T said it remains “on track” to be able to offer U-verse TV to 19 million living units by the end of 2008. As of Sept. 30, AT&T reported having a total of 3,000 U-verse TV subscribers, all in San Antonio.

U-verse TV, according to AT&T, is currently available in limited areas in or around San Antonio; Houston; San Francisco and San Jose, Calif.; New Haven, Stamford and Hartford, Conn.; and Indianapolis, Anderson, Bloomington and Muncie, Ind.

AT&T is deploying infrastructure for U-verse TV elsewhere in the 13 states where it and its legacy companies provide telephone service, including several suburban Chicago communities; Milwaukee; Anaheim, Calif.; and Reno, Nev. But the telco has met with local resistance in some areas, as cities seek to require it to pay for cable-franchise licenses. AT&T has insisted that U-verse TV isn’t a cable-TV service and should not be regulated as one.

The city of Milwaukee, for example, filed a lawsuit Dec. 20 that sought a preliminary injunction preventing AT&T from offering U-verse TV until an agreement on cable-franchise fees is worked out. AT&T spokesman Brad Mays claimed that the Milwaukee lawsuit and others filed by local governments have not slowed the rollout of the TV service.

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