AT&T to offer video on demand to DSL customers

AT&T has been testing Homezone in several states and expects to launch the new service throughout its 13-state region later this summer.

San Mateo, Calif.-based Akimbo sells a set-top box and video-on-demand service that's similar to Apple Computer's iPod-iTunes combination. Instead of selling music, Akimbo sells video that can be downloaded from the Internet onto the set-top box.

Homezone, a cross between a satellite TV service and IPTV, offers consumers a set-top box that gets satellite TV programming from Dish Network and also connects to a DSL line to offer Internet-based services from providers like Akimbo. It will be offered to AT&T customers where AT&T's new IPTV service called U-verse is not offered. And in markets where U-verse is available, Homezone will be offered as a secondary option, a company spokesman said.

AT&T plans to offer its Homezone subscribers the Akimbo Service, which hosts more than 10,000 on-demand programs from 125 different providers, and the Akimbo Player set-top box, which stores 150 hours of video. Exact pricing hasn't been disclosed, but Akimbo sells the service for $9.99 per month, and the set-top box costs about $199.99.

Adding TV to its lineup of services is crucial for AT&T, as it competes with cable operators that have already begun offering telephone service, along with TV and high-speed broadband services. AT&T is spending billions of dollars upgrading its existing network with fiber that reaches deeper into communities to boost broadband speeds. This new network, called Project Lightspeed, will let AT&T offer consumers Internet-based TV, phone service and ultra high-speed broadband that is comparable to, or even more robust than, services from its cable rivals.

AT&T plans to have Lightspeed available to about 80 percent of its customers in the next three years. It's already testing its IPTV service in San Antonio, Texas.