AT&T has reportedly announced that it will be substituting VoIP for circuit-switched voice in its U-verse service offering. The move is not yet posted as a press release on the AT&T site, but if true, it raises some interesting issues. The company does not propose to lower the price, and it appears that the customer has no choice. Given that our research shows considerably higher service complaint levels on VoIP versus PSTN voice, the change could create some challenges with customers, and we are not sure there is no regulatory impact to such a move. There is speculation that this is linked to a goal of FMC via IMS, but AT&T has not indicated such a policy and we are doubtful that a step toward an FMC goal would be made with so little PR ballyhoo. Certainly VoIP could lower costs for AT&T if support exposure could be controlled, and it may be that the decision is linked to cost overruns on U-verse. In any event, a decision to deploy VoIP as a part of U-verse might have the effect of validating other VoIP providers, which might be practical now that it appears that independent VoIP competitors will not be successful.