AT&T Goes High Def (T)(BLS)(VZ)

Lost in all of the news that the AT&T merger with BellSouth is facing big obstacles is the announcement that the big phone company will launch a high-definition TV service with 27 channels That is more than most cable companies have.

The new service, offered in several cities, is AT&T’s first significant attempt to play catch-up to its rival Verizon, which already is well along with its fiber-to-the-home initiative, and the cable companies. AT&T says it can make the service available to 19 million homes by the end of 2008

There is some real question about whether consumers will switch to high-definition programming quickly, altought many of them are buying high-def TVs. This could compound the problem of AT&T using high-definition as a sucessful marketing tool.

Leaving other considerations aside, the lead that Verizon and the cable companies have, and new services like the global video download product being launched by the founders of Skype are going to make AT&T’s effort fruitless.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.