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from: Detroit News

AT&T stokes cable, Web war
Some Comcast customers will have choice for 1st time
Tuesday, May 22, 2007

Eric Morath / The Detroit News

The days of rising cable bills could be over in Metro Detroit.

AT&T Inc. launches its U-verse television service in 50 Metro Detroit communities today, giving cable companies, chiefly Comcast, their stiffest competition yet.

A choice between providers could lead to lower costs and better services, likely ending a climb in cable prices, an analyst says.

Customers like Andy Stern of Southfield are ready to explore their options. He said he's been dissatisfied with poor customer service and missed installation appointments from Comcast and satellite providers.

Comcast "knows they're the only game in town, and they can treat you poorly," he said. "I'd definitely look at alternatives if they're available."

U-verse gives that choice to 100,000 local households starting today. U-verse offers similar TV, Internet and on-demand services as digital cable, but the data is routed through newly upgraded phone lines rather than cable wires. The service also touts new features, including a digital video recorder that can record up to four shows at once and a receiver that doubles as a wireless Internet router.

The technology has AT&T boasting that it's no longer "just a phone company." Comcast said the new competitor will not challenge their leadership position. The cable giant has 1.3 million subscribers in Michigan.

"We already have built a broadband network that our competitors are just now trying to emulate," said Comcast spokesman Jerome Espy. "This is already a competitive marketplace and we offer value-priced products and superior quality."

Comcast has been successful in stealing away more than 2 million phone customers from AT&T, Verizon and others nationwide with its digital phone service launched in late 2005.

While U-verse is available to homes in cities from Grosse Pointe to Northville to Trenton, it is not yet available in all homes in all 50 communities. In fact, of 10 addresses checked by The Detroit News, only one showed U-verse was available. AT&T says by year's end 250,000 households will have the service available to them as the technology behind the product rolls out further each day.

"U-verse says that our vision of being the only entertainment and communications company a consumer will need is becoming a reality," said Jennifer Jones, AT&T vice president and general manager for Michigan. "Detroit residents now have a new and better choice for their television provider."

From the first 50 cities, AT&T will expand to others in Metro Detroit, and eventually across much of the state. Prices for U-verse packages of TV and Internet services range from $59 a month to $129, in special introductory offers that end June 30.

The U-verse launch comes just six months after AT&T won approval for a statewide cable franchise. Previously, cable television providers had to apply community by community.

'Customers will win'

As far as TV service, satellite providers and smaller cable outfits, such as WOW!, do provide some competition for Comcast.

But AT&T is the first in Michigan large enough to match the cable company when it comes to investments, advertising and territory -- and without sticking a dish on your roof, said telecommunications analyst Jeff Kagan.

"Whenever you have choice, it increases competition," he said. "That decreases prices and improves quality. It raises the bar for Comcast. Now they are going to have to focus on customer relations and care in a way they haven't before."

Kagan said the threat of competition led to a smaller-than-typical cable TV price increases earlier this year and could mean prices will fall in the future.

The fight between massive corporate combatants also will lead to new services. AT&T, for example, anticipates adding online gaming functionality to U-verse. Comcast, on the other hand, touts a large and growing library of free on-demand shows and movies.

"AT&T will do some things that you can't do with traditional cable services," Kagan said. "So Comcast (is) going to try to one-up AT&T. … In the end, the customers will win."

Reinventing television?

While U-verse will offer a similar array of services to digital cable, it is not delivered through the same means. Television receivers, akin to cable boxes, plug into phone jacks, not cable outlets. Upon installation of U-verse, customers will have phone lines and jacks in their homes upgraded to higher-quality wiring. Similar upgrades are being made to the telephone lines that run through communities.

U-verse also offers customers Internet services that are up to four times faster than the DSL packages AT&T offers. Many Comcast customers receive a similar speed of Internet, but they can upgrade to an even faster product.

U-verse also will offer a litany of features that customers may not have seen in one place before. For example, digital video recorders can be set either with the remote, through a Web site or on certain Cingular phones. The product also will allow televisions to have picture-in-picture technology even on sets not equipped for the service.

It also features the typical digital cable offerings such as a high-definition signal, video-on-demand libraries and music-only channels.