Within months, AT&T Inc. plans to begin offering television service in Palo Alto over phone lines, introducing a new format for local programming that has the cable experts at the Midpeninsula Community Media Center and City of Palo Alto concerned.

When AT&T introduces its television service — called U-verse — public, educational and government (PEG) channels will have a lower resolution and be harder to find than its commercial channels, Community Media Center Executive Director Annie Folger said.

"They don't want to spend the money," Folger said.

But according to spokesman James Peterson, AT&T's plan to concentrate all PEG channels on a menu available at Channel 99 makes them easy to remember and will provide customers with access to PEG channels from regional communities as well.

"I think there has been some misunderstanding and misrepresentation," Peterson said.

"Of course we're completely committed to providing public, educational and government programming. We believe in it."

Terrestrial television providers are required to carry local channels for the privilege of using the public telecommunications network, a practice that dates to 1984, Folger said. Currently, only Comcast provides television service to Palo Alto. It carries seven PEG channels, Folger said. Satellite television providers are not under the same obligation.

Channels 26 and 29 screen government programs, while channels 27, 28 and 30 show public programming, she said. Stanford University has Channel 76 and DeAnza College produces Channel 75.

Changes to California telecommunications law in 2006, however, shifted control of cable franchises from local communities to the state, opening up Palo Alto and other cities to competition between providers.

AT&T was granted a state franchise to enter Palo Alto in March 2007, and Comcast plans to switch from a local to a state contract soon, according to City of Palo Alto Cable Coordinator Melissa Cavallo.

AT&T is currently extending its fiber network in the Palo Alto area, in preparation for offering television service, Peterson said. AT&T television is already available in East Palo Alto, although only about 20 households have selected it, Cavallo said.

Customers will have the ability to choose between Comcast and AT&T.

AT&T plans to use Internet Protocol rather than traditional cable broadcasting, which will make it easier for users to integrate cell phones, computers and other devices with their televisions, Peterson said.

But AT&T's plans for PEG channels have already been drawing criticism.

"We feel like their product is inferior to the product they use to offer commercial channels and it's going to impact this local community asset we have," Cavallo said. "The city's very concerned about it."

"We feel like under AT&T these channels will really suffer," Cavallo said.

Folger even testified before the U.S. House of Representative's Subcommittee on Telecommunications and the Internet on Jan. 29. She said several members of Congress shared her concerns about the different PEG formatting.

Among the problems, Folger said, the programs are hard to get to and the shows only fill one-quarter of the screen. It can be blown up to fill the entire television, but then appears blurry, she said.

All PEG channels are available on AT&T's Channel 99, Peterson explained.

Viewers click "OK," which triggers a list of cities to appear, according to AT&T documents. After scrolling through the cities, and selecting one, viewers than select which PEG channel they wish to watch.

Folger said the Channel 99 menu takes 45 to 90 seconds to load and burdens viewers with scrolling through dozens of city names.

"You'll have to be very, very motivated and extremely patient to actually find the channel you are looking for," Folger said.

Peterson said the channel takes 20 seconds to load, a delay caused by the amount of available information.

Digital video recorders (DVRs) also don't work with AT&T's PEG channels, Folger said.

The Channel 99 format, along with all of AT&T's U-verse offerings, is new and will be continually improved, Peterson said.

"This is a new product for us," Peterson said. "Enhancements are bound to come to the overall TV service."

Putting all the PEG programs on Channel 99 is more convenient for viewers, Peterson argued. No matter what city the viewer is in, he or she can find local programming on 99.

AT&T's PEG channels meet all regulations, company documents state.

It is "infeasible" to treat PEG channels the same as commercial channels because of practical, technical and economic considerations, AT&T states. It is impossible to insert local content without first routing it through AT&T's base distributor.

AT&T's PEG formatting also makes it easier to screen the programs online, the company states.

But the Media Center and other local stations are capable of creating their own Internet availability, Folger said.

"The point is we're channels; we're not supposed to be Internet," Folger said. "If we want to distribute our information other ways, we're already doing it. We don't need AT&T as our only way."

Folger said she believes AT&T could provide PEG channels akin to its commercial channels; it just chose not to.

"Clearly, it's a business decision," Folger said.

Comcast also doesn't approve of AT&T's PEG format.

Vice President of Communications Andrew Johnson said AT&T's Channel 99 plan violates PEG regulations.

"We certainly hope the new competitor will be forced to operate under the same rules and regulations," Johnson said Monday.

He said Comcast has no plans to change its delivery of PEG channels.

Folger said she doesn't know how many viewers currently access the Media Center's PEG programming.

"We don't measure our success by how many people are watching. We measure our success by how many people benefit," Folger said.

AT&T previously had a cable presence in Palo Alto. It purchased franchise rights from the Cable Co-op in 2000, but its broadband service was then bought by Comcast.

Currently, Comcast pays a group of communities — Palo Alto, East Palo Alto, Menlo Park, Atherton and some portions of unincorporated San Mateo and Santa Clara counties — a PEG-support fee and a franchise fee to account for its use of public resources.

Each Comcast customer pays $0.88 a month, generating about $327,000 for the Community Media Center each year, according to Cavallo. In 2006, the city received franchise fees of $581,000, a city report states.

Since 1983, Palo Alto has represented the group of cities in cable negotiations.