Thursday, August 2, 2007

AT&T to offer TV service in N.C.

RALEIGH - AT&T will spend $350 million to offer television to North Carolina households, creating a major competitor for cable and satellite companies and a new choice for channel surfers.

The phone company's investment in the state over the next several years, announced Tuesday in Raleigh, will pay for fiber-optic network upgrades needed to transmit TV signals over phone lines. AT&T wants to sell bundled packages of phone, Internet, wireless and TV service, which could help reduce prices and spur more technology.

But AT&T officials were mum on some crucial details Tuesday, such as when the company will start selling TV service in North Carolina and how much it will cost.

"We're working on getting the network upgraded and will say more -- probably before the end of the year -- on timing," said Cynthia Marshall, president of AT&T North Carolina after a news conference at the N.C. Museum of History in Raleigh. Ahead of that, "we don't want to give away too much to competitors," she said.

AT&T officials have said since last year that they are eager to get started. The company, which took over BellSouth's local phone business as part of its acquisition of that company last year, is losing its phone customers to rivals such as cable-TV companies.

AT&T began selling its U-Verse TV service months ago in Texas, California and other markets. The company has signed up 51,000 TV customers, up from 13,000 at the end of March.

"It's a nice situation for the consumer," said Elroy Jopling, a research director in Toronto for the Gartner research firm.

AT&T is a big company with deep pockets that can afford to break into the TV market. "The next few years will be kind of fun for TV viewers as they sit back, relax and decide who really wants their business," Jopling said.

Though some analysts question how the investment will play out for consumers, the industry thinks it is part of a competitive victory.

Phone companies "have spotted consumer demand for bundled services and are investing in the equipment to provide it," said Carole Woodward, chief executive of the N.C. Telecommunications Industry. The trade group was instrumental last year in persuading North Carolina lawmakers to pass new legislation.

In July 2006, after heavy lobbying, state lawmakers passed rules that made it easier for phone companies to offer TV service. The law, passed ostensibly to spur competition and investment, allows phone companies to get a statewide video license, rather than having to negotiate with multiple municipalities.

But even with the added competition, there might not be many new service offerings, analysts said. That's because AT&T isn't entering an underserved market so much as providing more of what is already being offered. If it doesn't, consumers will continue their exodus from traditional phone service to packages offered through Internet rivals and cable-TV providers such as Time Warner.

For now, "it's a defensive move to stop cable operators from getting people to switch over their services," said Vince Vittore, an analyst with Boston-based technology consulting firm Yankee Group.

Once AT&T has a better grasp on its network capabilities, it will likely announce slightly more competitive services, Vittore said.

Steve Notes: According to Wikipedia "AT&T U-verse is the brand name for a group of services provided over Internet Protocol (IP), including television service, Internet access, and eventually voice telephoneservice. The new services are carried on phone lines (or over fiber to the customer's premises), and are enabled by AT&T’s initiative to push fiber-optic lines closer to customers’ premises." To read more go to or


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