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AT&T launches TV service

In its first official rollout of U-verse, company offers the service to thousands of consumers in San Antonio.

AT&T is officially in the TV market.

The company on Monday made its U-verse TV service commercially available to 5,000 homes in San Antonio.

Until this week, AT&T's TV service was available to only a handful of consumers in that city, the first of many on the list of U-verse prospects. AT&T expects to offer the service to a total of 15 to 20 markets by the end of the year. The company has said it plans to spend $4.6 billion through 2008 to bring television and high-speed Internet services to almost 19 million homes.

At least initially, AT&T's service, which is based on Internet Protocol technology, will be very similar to what is already offered by cable companies. The starting price for packages is $69 a month and goes up to $124, depending on Internet speeds and whether the customer opts for premium-channel packages.

AT&T is offering three months of free U-Verse service to customers as part of its promotional push. It's also marking down its installation fee to $20 from $95.

This offering is on par with those of its cable rivals. But AT&T claims that it offers customers more for their money, including fast channel changing, video-on-demand, three set-top boxes, a digital video recorder, a picture-in-picture feature that allows viewers to surf channels without switching channels and an interactive program guide.

But some features, such as DVR service for the entire home and high-definition TV programming, won't be available until October.

During the initial expansion, AT&T U-verse TV will offer more than 200 channels, including music, local, premium-movie and sports channels. However, it will be adding new channels, high-definition content and other interactive features later in the year.

Now through July 31, the company is offering qualified customers three months of free service.

Some analysts predict that competition from AT&T could eventually reduce TV prices overall. But the price cuts could be a long time coming. So far, Time Warner, AT&T's main rival in the San Antonio area, doesn't plan to reduce prices.