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AT&T: IPTV Is Past ‘Will It Scale?’

ATLANTA -- Peter Hill, vice president of video and converged services at AT&T Labs, said Internet Protocol TV has proven it can scale up -- now that the company has passed the 100,000 subscribers -- and he outlined potential future IPTV applications the telco has in development.

“We’re in a sort of exponential growth stage for U-verse,” Hill said here at the TelcoTV conference Wednesday.

AT&T ended the third quarter with 126,000 U-verse TV customers, up from 3,000 at the end of 2006. In the last weeks of September, AT&T said it was nearing 10,000 installs per week for the service, up from 5,500 per week three months ago.

“We’re past the point of, ‘Will IPTV scale?’” Hill said. “Because we have over 100,000 subscribers -- you can’t get to that number without having significant automation.”

At the same time, however, AT&T this week experienced a widespread glitch with U-verse TV that blocked access to dozens of cable channels.

On Sunday, Oct. 21, subscribers in all of the 33 markets where AT&T provides U-verse TV service lost service to all or some of their channel lineups early in the morning. AT&T restored local broadcast TV channels and some cable channels within a few hours but did not restore the full lineup to all markets until 8:30 p.m. ET.

What caused the outage? Hill didn’t directly address the snafu in his remarks, but other AT&T executives have said the problem stemmed from a back-end software upgrade gone awry.

AT&T chief financial officer Rick Lindner, on a conference call with analysts Tuesday, said the channel outages were caused by a “software load” that the telco put on its operations support system (OSS). OSS software handles tasks related to managing network devices.

Lindner said the glitch was unrelated to the U-verse TV architecture “or the scaling of the platform.”

The software load, Lindner said, “unfortunately impacted the database that’s used to track and maintain the programming packages that customers are subscribed to. And what that caused on Sunday is it caused customers to lose some channels for part of the day.”

AT&T is providing customers with some credits to compensate for the loss of service. Lindner said that “since we’ve identified what the issue is, we’re going to work to make sure that it does not happen again.”

Hill, in his presentation at TelcoTV, described IPTV applications AT&T has in the labs. “These are services that are concepts, not a roadmap of applications that AT&T is working on a from a marketing sense,” he said. “It’s from a labs, ‘art of the possible’ perspective.”

One was a “family finder” on the TV, which showed the location of family members and friends using GPS-based phones to plot them on a Yahoo map. Hill zoomed in on a dot representing his own phone in the Georgia World Congress Center, where TelcoTV is taking place.

Hill also demonstrated “uCast,” an application for sharing home video clips to other IPTV subscribers. “This is really niche content,” he said. “But my mother in Great Britain would be interested in it.”

At another point, Hill logged in to the U-verse TV service using an Apple iPhone, which then loaded a remote control to navigate menus and control the DVR. The iPhone communicated with the Motorola IPTV set-top through an infrared link.

Other applications included more familiar ideas, such as caller ID on the TV, playing back voicemail, sending messages from a cell phone to the TV, pulling up local weather forecasts, downloading Internet-based content like podcasts, and shopping for DVDs on Amazon.com from the TV.

“We’re not having to go out and create all this stuff in IPTV,” Hill said. “We’re reaching out to these decades of innovation on the Web and incorporating that into IPTV.”

Meanwhile, rumors continued to circulate that AT&T plans to acquire either EchoStar Communications or DirecTV to accelerate its TV business.

The Wall Street Journal on Wednesday reported that AT&T “appears to be getting ready to swoop in” on one of the satellite companies. The company has consulted lawyers in Washington, D.C., to determine how long government approval would take for such a deal, according to the paper.

The Journal noted, however, uncertainties associated with a bid for EchoStar and DirecTV, including a price tag of between $30 billion and $40 billion.