Recent days have seen a flurry of new launches for video services by both AT&T and Verizon. Markets like Jacksonville, Florida, South Bend, Indiana, and Hampton, Virginia are all now able to receive video from the local phone company in addition to cable and DBS options. And it’s not just the large players either. Smaller telcos across the U.S. continue to launch IPTV services. Avail Media, an aggregator of content and IPTV solutions for smaller telcos, announced 20 new affiliates this week. The competitive posturing continues as well, with all kinds of promotions being offered to entice people to switch services. I live in the D.C. area and noticed a commercial from Comcast the other day promoting free DVR for a year – a direct response to Verizon FiOS’ ongoing free multi-room DVR promotion. The ongoing battle lines seem to be intensifying. Should be fun to watch.

AT&T announced that U-verse is live in Wichita, Kansas. U-Verse TV, broadband, and U-Verse voice are all now available in Wichita. AT&T has not been uniform with the launch of U-Verse voice at the same time as U-Verse TV. Some markets wait several months after the launch of U-Verse before the voice portion is available. "With the launch of AT&T U-verse TV, Wichita customers are finally getting a better choice to break free from cable," said Kristopher Ryan, AT&T general manager for Kansas and Missouri.

AT&T announced a partnership with Yahoo! Sports Fantasy Football. The fantasy football feature will utilize the U-Verse U-bar to track fantasy teams and scores. The U-bar offers other interactive features focused on sports, weather, stock and traffic information. In a statement, G.W. Shaw, AT&T executive director of U-verse marketing says, “Because of the powerful integration that Internet Protocol (IP) enables, we're able to bring your personalized fantasy sports and NFL information directly to your TV screen.” The basic service is free, but a premium service featuring StatTracker, a real-time application that tracks player, team and league statistics, for $9.99 is available.

AT&T released their latest quarterly numbers, revealing the progress of U-Verse and their other business lines. Depending on your point of view, U-Verse is either progressing nicely or is woefully inadequate. AT&T’s PR spin indicates the former, but the real view is only available to AT&T insiders, analysts, and the “flies on the boardroom wall.” If you place U-Verse’s video subscriber additions (170K net adds for 2Q08) in the context of its cable competitors progress in taking voice lines (Comcast has averaged 646K net phone adds the past three quarters), you walk away very underwhelmed. Even if AT&T hits its target of 1 million video subs by the end of the year, it still pales in comparison to the momentum of cable taking voice subscribers. But if you subscribe to the opinion that voice lines are becoming less and less important in today’s world of wireless and broadband, than any video progress for AT&T could conceivably be considered “gravy.” That opinion suggests that massive numbers of wireline customers are going to give up traditional voice service anyway, so if I can continue to replace that fleeting revenue with a triple play of broadband, video, and wireless, maybe I’m all the better for the future.

Time will tell whether the billions of dollars of U-Verse investment will ultimately be worth it. The reality for AT&T is they didn’t really have a choice. Their traditional cash cow, local access lines, is dying on the vine because of wireless substitution and IP voice competition. They are executing quite well on their wireless strategy (at least from a quarterly financials point of view), which is the ultimate equalizer for declining access line counts. Consider that in 2Q08, AT&T added 1.3 million net new wireless subscribers and lost 1.5 million switched access lines, and you can begin to accept the “writing is on the wall” cliché. U-Verse will play an ever increasing role in AT&T’s evolving future, ensuring those local access loops still have a reason to exist and still generate a healthy revenue stream. But before they get too ahead of themselves with glorious quarterly reports that toot more horns than a steam locomotive, they would do well to prepare for a more level future competitive playing field. A more intense competitive picture will emerge when and if their cable competitors gain a wireless opportunity of their own. Who ultimately wins in that scenario?

AT&T officially unveiled U-Verse in the Miami/South Florida market. U-Verse is available in parts of Miami-Dade and Broward counties now and will be available in Palm Beach County on July 28. The current AT&T South Florida emphasis is on U-Verse TV and high speed Internet. U-Verse voice is not available yet. In some markets, AT&T has launched all three together. In markets where U-Verse voice is not available at the time of launch, AT&T has put emphasis on bundling wireless voice. U-Verse voice availability usually follows within two to three months, if its not available at the initial launch.

AT&T announced an agreement with NBC Universal to provide expanded coverage of the Olympics across their three screen footprint. Olympics coverage will be presented to the television, PC, and mobile phone. The coverage across three screens will include:

• The NBC Olympics 2Go mobile TV channel, which provides “around-the-clock NBC coverage of the Olympics, including live competition footage.”
• In addition to regular coverage of the Olympic events, U-Verse users will gain access to on demand content including “a wrap-up of the best events of the day as well as on-demand access to between 15 and 20 unique events each day.”
• On the broadband front, subscribers will have access to Olympics on demand content, as well as download interactive widgets from NBCOlympics.com.

The AT&T Olympics All Access Pass promotion is illustrative of the so called “three screen strategy,” where carriers want to leverage their entertainment, broadband, and wireless networks into one integrated experience. Future iterations of this strategy will allow seamless “hand offs” of content viewing across platforms, so as I’m watching something on TV, and need to go mobile, I can pause that program on the TV, transfer it to my mobile device, and begin watching right where I left off. AT&T and Verizon are the two carriers poised to execute the three screen strategy first, and hope to build significant competitive advantage because of it. They’ll need to execute quickly, because cable is right on their heels, with their own wireless strategy. One that they hope will translate into a three screen experience of their own.

AT&T announced the launch of its integrated U-verse bundle, which includes AT&T U-verse TV, AT&T U-verse High Speed Internet and AT&T U-verse Voice in Tulsa, OK. The service will also be available in Jenks and Owasso, OK. AT&T will make U-verse services available to more homes throughout the area on an ongoing basis.

AT&T today announced the availability of U-verse Voice in several Ohio markets, including Columbus and Akron. U-verse voice is an IP voice product which is bundled with U-verse broadband and video services. U-verse voice adds a suite of features to traditional voice service including, unified messaging, click to call from the TV or PC, simultaneous ring of up to four phones, and a web based call management portal. AT&T offers to U-verse voice plans; 1) U-verse Voice Unlimited, which includes unlimited local and nationwide minutes for $40 a month, and 2) U-verse Voice 1000, which includes 1,000 Call Anywhere minutes to any location in the U.S. or U.S. territories for $30 a month.

AT&T today announced the availability of U-verse Voice in parts of Oklahoma City. U-verse voice is an IP voice product which is bundled with U-verse broadband and video services. U-verse voice adds a suite of features to traditional voice service including, unified messaging, click to call from the TV or PC, simultaneous ring of up to four phones, and a web based call management portal. AT&T offers to U-verse voice plans; 1) U-verse Voice Unlimited, which includes unlimited local and nationwide minutes for $40 a month, and 2) U-verse Voice 1000, which includes 1,000 Call Anywhere minutes to any location in the U.S. or U.S. territories for $30 a month.

A very interesting competitive development is taking place in the Dallas, TX suburbs. Verizon is apparently preparing to overbuild AT&T U-verse territory with Verizon FiOS service. This is a first, at least that I'm aware of, where large incumbent "baby bells" enter each other's territory with competing landline services. Apparently, the rules have changed, and dramatically so. Verizon appears to be taking advantage of statewide video franchising rules (as Texas provides), and acting as a cable overbuilder, as opposed to a traditional telecom CLEC. The development was reported in this OneTrack post. I guess the gloves are slowly coming off.

This strategy does go counter to conventional wisdom. Verizon is entering the market as the third triple play provider, competing with well established brands (not to mention the DBS competition). Most business consultants would advise against such a move. What does Verizon have up their sleeve? Do they feel that strongly about FiOS and its competitive advantage/differentiation? Perhaps. It will be an interesting test case to observe. If Verizon has some success with this overbuild strategy, will we see it in more territories where Verizon is geographically positioned against AT&T and Qwest? Verizon's purchase of GTE several years ago gives them multiple territories in multiple states that are closely aligned with incumbent AT&T and Qwest territories. Qwest would seem to be more vulnerable, since they have no triple play network of their own. Of course, if Verizon aggressively moves on an overbuild strategy, AT&T certainly won't sit back and wait - they may decide to strike first. I recognize this is just speculation, seeing as the first household in AT&T territory has yet to be lit with FiOS. But this is definitely a development to keep a close eye on. We may be witnessing the first salvo of an historic competitive battle.