Year-in-Review 2012: AT&T commits billions to wireline, plots U-verse IPTV apps


The year's second biggest story had more to do with the image and hopes of an entire space--wireline telecommunications--than the direct impact on IPTV, although the future of IP-based video in the United States is certainly a prominent piece of it.

AT&T (NYSE: T), which has so relentlessly promoted its wireless network and wireless prowess that some might think the company no longer has a wireline business, announced it would spend $14 billion over the next three years to expand its wired broadband network. In doing so, the carrier specifically included its U-verse IPTV business--and that was big news in a year where IPTV seemed to be getting short shrift compared to wireless.

The end game as envisioned by AT&T would be wireline coverage of 75 percent of its 22-state footprint with U-verse service available to a universe of 33 million customer locations. That means AT&T, unlike its large wireline telco cousin Verizon (NYSE: VZ) and its FiOS service, will continue to roll out IPTV in new markets for the next three years.

U-verse has proved popular, acquiring 198,000 IPTV customers in the third quarter to sit at somewhere around 4.3 million TV viewers.

Called Project VIP, the $14 billion proposal "is a major commitment to invest in 21st Century communications infrastructure for the United States," AT&T Chairman-CEO Randall Stephenson said in a press release. "These are things we've done before--logical extensions of proven technologies and already successful businesses."

The plan is for residential U-verse service to continue to be based on fiber-to the-curb (FTTC) infrastructure as the carrier promised to "proactively expand its fiber network."

On the other hand, in a bit of good news-bad news for U-verse IPTV subscribers, AT&T hedged its bets by noting that in locations where it is "currently not economically feasible to build a competitive wireline network," 4G LTE would be called on to do the job "as it becomes available." In all, it's expected that about 25 percent of all wireline locations will eventually be fed with 4G LTE, and it's not at all clear if there will be enough bandwidth there for a viable IPTV offering.

The question of what part LTE will finally play in the IPTV offering put a damper on the announcement.

As if sensing some degree of market uneasiness about its future TV plans, AT&T later in the year hosted an industry analysts' conference where it laid out some plans about what it has in store for U-verse.

Analysts received demonstrations of existing U-verse apps such as a Facebook connection and an Easy Remote for hearing and visually impaired subscribers. A second screen user interface for Packet Video's Twonky Beam service that opens access to OTT video content was also trotted out, according to a story in Telecompetitor, which had access to the Atlanta-based show.

"AT&T Labs is also experimenting with apps that might enable people to play videos and view photos residing on their smartphones or tablets on the TV. and in reverse to Twonky Beam, AT&T labs is also looking at ways that U-verse can mediate the process of moving personal content residing on the home servers and PCs through in-home wireless or mobile devices," the Telecompetitor story said.

Combined, the $14 billion wireline investment and an analysts' conference demonstrating future U-verse applications both offered positive notes that the nation's largest IPTV rollout will continue at least for the next three years.

Into the future: If the announcement holds true, U-verse has at least three more years left in its future. If the applications showcase becomes reality, the service will actually add competitive and possibly trend-setting features to differentiate its IP-based prowess.