Internet Technology Tests AT&T's Bid For TV Subscribers

INTERNET TECHNOLOGY TESTS AT&T'S BID FOR TV SUBSCRIBERS
[SOURCE: Wall Street Journal, AUTHOR: Peter Grant peter.grant@wsj.com]
AT&T's big bet on using Internet technology to vault ahead of rival cable operators in the television-distribution business is beginning to look more like a long shot. The telecom giant says it has rolled out its so-called U-verse service in 11 cities. But that's four fewer than promised, and the technology seems to remain mostly in the trial phase. AT&T executives acknowledge they aren't fully marketing U-verse because the service can't yet handle a surge of customers. AT&T counted just 3,000 customers at the end of the fourth quarter, unchanged from three months earlier. Meanwhile, AT&T executives last month admitted for the first time that there were problems with the software for U-verse provided by Microsoft, its primary vendor on the project. That's a concern not just for AT&T, but for telecom companies world-wide that bought Microsoft technology to run TV services using Internet protocol, or IP, to transmit signals. It isn't clear how serious the problems are because AT&T and Microsoft executives won't discuss them. The delays plaguing U-verse have fed criticism that AT&T and Microsoft overreached, trying to get more out of Internet technology than it's capable of delivering at this time. The skeptics include vendors, former employees and competitors. If AT&T did overreach, it was out of necessity. The company faces pressure to get into the TV business from cable companies that are luring away tens of thousands of customers with their "triple play" offers of phone, TV and high-speed Internet services.
http://online.wsj.com/article/SB117080773641100240.html?mod=todays_us_marketplace
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