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AT&T Takes U-Turn on U-Verse as It Pushes Users Toward DirecTV

  • Service lost 240,000 TV customers as more shifted to satellite
  • Company develops hub plan to consolidate all video offerings

AT&T Inc. is phasing out the U-verse TV service as it pushes new customers to newly acquired DirecTV, a sign the company is giving up on once-heralded plans to compete head-on with cable through telephone lines.

The biggest U.S. pay TV provider has stopped building U-verse set-top boxes and is nudging prospective customers toward its satellite unit, which has lower hardware and programming costs. The shift is the first stage of a plan to create a “home gateway” within three years that will consolidate all AT&T services and act as a central hub to deliver video to any device.