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While the situation in Milwaukee remains tenuous for AT&T, it’s certainly brighter in the California Bay Area, where the telco just launched its IP-based U-Verse service.

AT&T is trying to sweeten the pot there by offering two free months of TV to customers who sign up through March 31, 2007, and backing it with a 60-day money back guarantee.

AT&T said it is offering U-verse in “limited areas” across the San Francisco-Oakland-Fremont metro area, including portions of San Ramon and Danville.

The telco is kicking the service off with 25 HD channels, remote DVR programming capabilities, plus traditional high-speed Internet services. The high-end “Elite” tier, offered in tandem with Yahoo!, offers 6 Mbps downstream/1 Mbps upstream.

AT&T said it expects to launch U-verse in 11 markets by year-end.

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