ATLANTA -- TelcoTV 2007 -- AT&T Inc. (NYSE: T) put on an IPTV show this morning, as TelcoTV keynoter Peter Hill, vice president of video and converged services for AT&T Labs, showed what is possible when the walls between fixed and mobile services are broken down.

With U-verse installations now growing rapidly, Hill said AT&T has accomplished its first goal -- being able to produce a scaleable IPTV service. (See AT&T Sees iPhone Pop in Q3.) Then he sprang into demo mode.

One application involved the embedding of AT&T's new wireless video sharing service into U-verse. (See AT&T's Wild About Wireless.) Hill showed how a user on a video-sharing phone could dial up someone on U-verse, with the images appearing on the TV screen.

Another application planned for U-verse is the Family Finder. Using the TV remote control, a U-verse customer could pull up a map on the TV screen that shows the locations of all family members who are carrying AT&T wireless phones.

Hill also showed a U-Cast service with which you can upload a video from any standard video camera and view it on U-verse via your set-top box. Friends on U-verse can then view the video as if it were a TV channel. For those who don't have U-verse TV, there are plans to make U-Cast content viewable on the Internet through a Web browser.

The message from AT&T was that IPTV makes all this feasible. "We didn't create any of these concepts, but the ease of integration on a common platform is what is different about IPTV," said Hill.

This position is similar to the one that Verizon Communications Inc. (NYSE: VZ) laid out when discussing its plans to move the FiOS TV service to IPTV. (See At Age 2, Verizon FiOS Evolves.)

But as AT&T dishes out interactive applications, amasses more high-definition (HD) content, and adds DVR capabilities, some question whether the fiber-to-the-node architecture can keep up with the resulting bandwidth crunch.

"The big bear obviously is HD," said Hill when Light Reading brought up the question. "HD was 8.5 Mbit/s until recently, and encoder rates have reduced this to 6 Mbit/s. This reduction in bandwidth is going much faster than we expected. So while we're seeing an increase in bandwidth demands, we're seeing a reduction in bandwidth needs based on encoding. It's far ahead of where we thought it would be."

If AT&T can deliver everything it promises, its new services could provide an attractive offering. "I don't know how all these capabilities will eventually play out in the market," said Hill. "But the fact that there are these differences, I'm really excited about it."

— Raymond McConville, Reporter, Light Reading