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AT&T to Spend $1.1B in Three Southeastern States

As part of bringing U-verse TV to former BellSouth territories, AT&T expects to spend $1.1 billion over the next few years on fiber-optic network upgrades, broadband deployment and Internet technologies in three Southeastern states.

AT&T this week announced plans to invest approximately $350 million in North Carolina and $250 million in South Carolina. That follows the telco’s commitment in May to spend $500 million in Georgia.

Atlanta will be the first market in the region where AT&T will offer the U-verse TV Internet-protocol-TV service.

“We will launch the product in the Atlanta area before year-end. We're working hard to make that happen,” AT&T CEO Randall Stephenson said in an interview in the Atlanta Journal-Constitution last Friday. Comcast and Charter Communications are the two primary cable operators in the Atlanta metro area.

Aside from Atlanta, AT&T has not announced a timetable for when U-verse TV would be available to consumers in the rest of Georgia or the Carolinas, according to spokeswoman Terri Denard. The network investment “is a first step in the process,” she said. “This is getting the infrastructure in place.”

The telco claimed that increased competition in the video market would result in new jobs being created -- more than 3,000 in North Carolina and 1,400 in South Carolina. At the same time, its acquisitions of BellSouth and Cingular Wireless are expected to eliminate 10,000 jobs.

AT&T said the U-verse expansion in the Southeast is the result of video-franchise-reform laws recently passed in Georgia and the Carolinas. However, critics have charged that such statewide-franchise rules haven’t served to accelerate deployment or lower prices for consumers.

AT&T noted that the planned network upgrades do not change its capital-spending guidance for 2007 and 2008. In May, it said the U-verse buildout would be as much as $1.4 billion more expensive than it previously forecast, costing $6 billion-$6.5 billion from 2004-08 compared with the previously expected $5.1 billion over that time period. According to AT&T spokesman Brad Mays, the investment numbers the telco has announced in the Southeast region encompass spending that goes beyond 2008.

The telco added that it would provide a “comprehensive update” later this year regarding the investment in the U-verse network in the Southeast region.

As of June 30, the telco counted 51,000 U-verse TV subscribers in 23 markets.