AT&T is working on various prototype applications for its U-verse platform in an effort to distance itself from its cable and satellite competitors.

AT&T’s roll out of its IPTV video services has been slower than it originally anticipated, but with more than 126,000 current subscribers, the company feels as though it’s on the right track . AT&T started the year with 3,000 video subscribers, then grew that base to 16,000 and 60,000, respectively, in the first and second quarters.

“We’re past the point of last year where the question was, ‘Will IPTV scale?’,” said Peter Hill, VP of converged services at AT&T Labs Research, during the first keynote address Wednesday morning at TelcoTV.

“You can’t get to that number (126,000 subscribers) without significant flow through and automation. We do have a competitive service and we can do it to scale.”

AT&T has whole home DVRs on its radar for deployment for next year, which will allow set-top boxes in other rooms of a home to access video content that has been downloaded to a DVR set-top box. Like its cable and satellite competitors, Hill said AT&T will also add to its current stable of 30 HD channels next year.

“The encoding rates for H.264 have come down faster than we projected,” Hill said. “We’ll be able to do more channels in the same amount of bandwidth.”

Other new features for U-verse subscribers slated for next year include photo sharing via Microsoft middleware and a VoIP service.

While cable executives have said there is no compelling reason to move to an IP infrastructure to deliver video services, Hill contends that IPTV is “very different from cable and satellite” because the nature of IP allows for easier integration among services while also allowing it to take advantage of Internet partners such as Amazon.

Hill spent part of his presentation talking about prototype features that could, at some point, be added to the U-verse stable. One of those features is “Cinema Center” that allows movies to be purchased from Amazon with one click. The movie portal content would be dynamic and would allow subscribers to view trailers prior to making their purchases.

“We don’t have to create this stuff in IP because it reaches out to Web devices and incorporates them into IPTV,” Hill said.

Hill also demonstrated a feature that used an i-Phone to remotely configure channel favorites on a home TV. The application would give four different i-Phone users the ability to program their favorite shows on their own TVs in a household. The favorites feature allows subscribers to use their TVs as personalized devices, Hill said.

A Web cam feature would let viewers in different locations view a live performance of a sporting event or dance concert based on IP technology that uses switched digital video.

While features such as TV Caller ID aren’t new to cable - Time Warner Cable has deployed an in-house TV Caller ID service while Intergra5 has enabled the service with several cable operators - Hill said it’s the ease of IP in enabling these features that separate the IPTV versions.

During the question-and-answer segment, Hill said AT&T would continue to rely on the Motorola set-top box with the Sigma Designs processor as its main workhorse, although it’s also working with Scientific Atlanta on a box with the same signature.

Hill expected new set-top boxes with second-generation chipsets from Sigma and Broadcom to be available in 2009.