AT&T has started the commercial launch of its U-verse IPTV service, beginning today in San Antonio. The service is launching with a three-month free TV service offer for those who sign up by July 31st.

The San Antonio launch marks the first IPTV commercial service by a major telco in the U.S. -- the service is widely deployed by independent telcos in the U.S. and by larger firms abroad. AT&T's rollout of IPTV is being carefully watched, however, as it represents the telecom company's best chance of competing with cable in selling bundled services.

The launch follows a field trial in San Antonio, AT&T's headquarters, beginning last December. According to Web reports, AT&T is planning to roll out service in Houston this summer as well, although the company would neither confirm nor deny that.. AT&T has said it will lauch U-verse in 15 to 20 markets this year where it had built out its Project Lightspeed fiber-to-the-node network.

U-verse includes 200 channels of IPTV, Spanish-language programming, video-on-demand, and an interactive program guide. Features exclusive to IPTV include faster channel-changes, a mosaic approach to picture-in-picture displays, and content searches via keywords such as actor names.

The service is launching with DVR capabilities on one receiver but will add whole-home DVR capabilities and High Definition TV later.

The U-verse service includes IPTV and high-speed Internet access, and is priced at $69 to $124, depending on the speed Internet access chosen. AT&T is offering access at 1.5 Megabits per second; 3Mb/s and 6 Mb/s.

The company is offering a special $20 iintroductory package that covers installation of up to three IPTV receivers, one with DVR capability and video instruction on how to use the service. Installation charges will normally be $95. The service also includes wireless home networking at no extra charge. TVs become IP-enabled via the receivers and can be used to display digital photos and other content.