AT&T IPTV Hits Milwaukee

U-Verse TV Launches in Milwaukee and Racine, Wis., Despite Lawsuit

By Todd Spangler -- Multichannel News, 2/28/2007 8:51:00 PM

AT&T fired up the U-verse TV machine again with the launch Wednesday of the Internet-protocol-TV service in limited areas of Milwaukee and Racine, Wis. -- even as a federal lawsuit filed by the city of Milwaukee seeking to block the rollout remains unresolved.

On Dec. 20, the city of Milwaukee filed a suit against the United States’ largest telco in the U.S. District Court for the Eastern Division of Wisconsin, Milwaukee division, asking the court to declare whether U-verse TV is a cable product and seeking to force AT&T to pay cable-franchise fees. The city also sought a preliminary injunction against AT&T until the parties could work out an agreement.

Vince Moschella, deputy city attorney for Milwaukee, confirmed that the lawsuit against AT&T is still pending. However, he added, the city is at the same time “attempting to negotiate an interim operating agreement” with the telco.

AT&T spokeswoman Jenny Parker said the telco proceeded with the rollout in Milwaukee because “we are in good-faith negotiations with the city of Milwaukee and [are] making some progress.”

AT&T notified the city 30 days ago of its launch plans, Parker said, and it made a “binding commitment” to the main issues the municipal government cares about -- revenue sharing and support for public, education and government (PEG) channels. “The commitments will remain in effect while any legal issues are resolved either through a settlement with the city or the courts,” she said.

Time Warner Cable is the incumbent cable provider in both Milwaukee and Racine.

Elsewhere in the telco’s traditional 13-state service footprint, AT&T next plans to roll out U-verse TV in parts of the Dallas-Fort Worth metro area in early March and then Kansas City later in the month. That would bring U-verse to 15 markets by the end of the first quarter -- a milestone the telco had hoped to hit by the end of 2006.

AT&T initially deployed U-verse TV in June in San Antonio, where the company is based. It announced service availability in parts of Houston in November and then in nine other markets in late December.

The company suspended marketing activities behind U-verse TV in October as it ironed out some glitches with the IPTV software provided by Microsoft. Starting in mid-February, the telco resumed direct-marketing efforts, including employing door-to-door sales representatives in neighborhoods where U-verse TV service is available, the company said.

AT&T said it now has about 7,000 U-verse TV subscribers. It reported having 3,000 as of Dec. 31, 2006, which was unchanged from the previous quarter.