AT&T; TV: Worth a look?
YOU’VE got another pay television provider that wants your business. But are AT&T; Inc.’s upgraded phone lines a smart way to watch TV?
The behemoth of phone companies is pushing into a new field, offering video programming in parts of 14 Southern California communities, from Simi Valley to Anaheim to Riverside. And that’s just for starters.
A mere infant in pay television, AT&T; is spending up to $6.5 billion in its initial phase to build a hybrid network of fast fiber-optic and conventional copper wires to deliver its U-verse TV service. It expects to cover 18 million homes in California and 12 other states by the end of next year.
If U-verse is a success, AT&T; is expected to offer the program eventually in most of the places it has telephone service.
“It’s very revolutionary for AT&T; to say, ‘We’re going to use a phone system to deliver video,’ ” said analyst James McQuivey at Forrester Research Inc. “They have to make sure it works just as well as cable. Then they have to differentiate it. Because if it works just as well, why switch?”
The answer depends on your desires and your budget.
U-verse customers are telling AT&T; that picture quality is generally better than cable and satellite. And they like a few of U-verse’s free features, including faster channel changing than digital TV and the ability to record as many as four shows at once on a rent-free digital video recorder.
On the flip side, U-verse can send only one high-definition signal at a time, which means you can’t record one HD show while watching another. You can with cable and satellite providers and with the FiOS TV service from Verizon Communications Inc., which runs on an all-fiber network to the home.
What’s more, if you want to get Internet access from the same provider, the connections from cable companies and FiOS can be faster than U-verse.
The marketers at AT&T; and Verizon have tough jobs: Many of the things that make their services different from cable aren’t very easy to get across.
The key distinctions lie largely in the boring details of how the systems are put together. That’s one reason the phone companies are trying to get closer to customers by showing off their TV offerings at neighborhood functions and in traveling vans.
The phone giants do have some cool, new features:
* Hate that annoying lag time switching channels on digital TV sets? U-verse has an answer called fast channel change.
* Want to build your own alerts for local news, weather and sports that move across your TV screen at the push of a button? Verizon’s FiOS service can do that, and U-verse is getting ready to offer something similar.
* Need a digital video recorder that can capture up to four TV programs at once, including one high-definition channel? U-verse has the only one that does that.
* Need to go to another room to finish watching a video-on-demand movie when your husband’s poker buddies stop by? U-verse lets you pause the program and pick it up again on another TV set.
* Want to search the video-on-demand library easily, even by actor? U-verse offers that, and FiOS soon will.
* Need to have your computer and TV on the same network so you can listen to your music, see your home pictures and movies or watch video from the Internet on your TV? Try FiOS and, soon, U-verse.
To get those features and others, such as video on demand, you may need a high-end, multi-room digital video recorder. Verizon leases it for $20 a month, on top of the regular $43 pay TV fee. AT&T; includes a DVR, along with two standard set-top boxes, in its package.
Forrester Research’s McQuivey, for one, believes that all of the features amount to “very minor changes in customer experiences.” But AT&T; executives say that’s not what customer focus groups are telling them.
“The customers are saying, ‘You’re providing us with features we didn’t think about,’ ” said Lee Ann Champion, an AT&T; senior executive vice president.
Time Warner Cable Inc., Southern California’s dominant cable firm with 1.9 million customers, isn’t waiting for the new competition to come its way.
One of its hottest new features is its free Start Over control, which lets customers coming home in the middle of a show hit one button to restart the program. Its Look Back function can recall programs that appeared in the previous 24 hours. Both are expected to be available this year.
There are no contracts to sign with Time Warner, as there are with the phone companies, and no activation or termination fees.
Its digital phone service, meanwhile, comes with multiple calling features and allows caller ID numbers to flash on the TV screen so customers can decide whether to take a call or let it go to voicemail.
Cable and phone companies are chasing the holy grail of convergence. They want to tie together all the devices -- TV, personal computer, cellphone, laptop, wireless hand-held organizer -- so customers can watch or listen to what they want, wherever they want, whenever they want and on whatever device they choose.
To do that, they need to get more customers buying digital programming and DVRs that interact with other set-top boxes in the house. Often, the companies say, customers ordering a basic bundle decide to pay more to upgrade one or more of the services, such as higher Internet speeds or a movie tier.
Many people like the convenience of having phone, TV and Internet access service from one provider and the charges on one bill -- the so-called triple play. In many cases, discounts are available because each company wants all your business.
Ultimately, customers will decide which features take off and which companies thrive. And it may be price that dictates how market share is split up.
Charter Communications Inc., for instance, is enticing residents in its service area in Southern California -- including Long Beach, Burbank, Glendale and Pasadena -- by offering 38 basic TV channels, high-speed Internet and nationwide calling for $70 a month.
Subbing in basic extended TV, with more than 200 channels, bumps the cost to $100.
AT&T; isn’t putting its phone plans in the U-verse bundle yet. But those who buy a typical package of more than 200 channels and 3-megabit-per-second Internet connections would pay $79 a month, a $10 discount off the price of both sold separately.
The companies say they don’t want to compete on price, but they recognize that with similar services, they have to do something to stand out.
“The winner is going to be who delivers the best value, makes it simple and gives the best customer service,” said Joseph Ambeault of Verizon.
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Selling the bundle
Here are prices for typical bundles of phone, TV and Internet access,* as well as discounts off standalone prices:
*--* Company Bundle Savings AT&T; U-verse $79** $10 Charter 100 61 Cox 127.53 10 Time Warner 115 15 Verizon FiOS 100-110 15-20
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*Based on nationwide calling, basic extended TV (not including set-top box rental) and Internet speeds of 3 megabits per second (AT&T; and Charter) to 15 Mbps (Verizon).
**AT&T; phone service not included in the bundle.
Sources: The companies
