According to Dan Rayburn, an expert in the streaming and online video industry, in his blog BusinessofVideo.com (businessofvideo.com) AT&T expects to spend between $70 to $80 million on infrastructure this year and by the end of 2008 plans to have "400 Gpbs of capacity online, for all its content delivery services, which would increase its capacity by 4x what the company has now."

AT&T says that when completed, its content delivery services will be delivered from 32 nodes in seven countries, will be Adobe Flash Certified by the end of 2008 and will be supporting live and on-demand delivery for all major formats.

AT&T has indeed been aggressively expanding its data center network and, according to Data Center Knowledge, now has 28 facilities worldwide - 14 in the US and 14 overseas. Last month, AT&T announced its plan to expand its network with a focus on Boston, Dallas, Amsterdam, Netherlands and Singapore, just six months after it announced new data centers in Toronto and Piscataway, New Jersey.

"Currently, some customers of AT&T's are still having their content delivered via Akamai, who AT&T has been re-selling and using as one of its partners for some time," writes Rayburn in his blog. "But moving forward, AT&T expects to deliver more content across its own network and rely less on partners for delivery. AT&T has been busy training its direct sales force and re-sellers to sell its CDN services."

AT&T hasn't disclosed how many customers it currently has for its CDN services or how much revenue it wants to generate from it, but the telecom provider has listed Forbes.com, AccuWeather.com and the US Golf Association as current customers.

Despite al the hurdles it will have to jump before establishing itself as a major player in the industry, Rayburn says AT&T has some obvious advantages like the fact it's not a startup and isn't relying simply on its CDN services for revenue. AT&T also has "an enormous marketing budget, reseller channel and plenty of R&D resources," and perhaps most interesting of all, AT&T already owns the network pipes it needs to run a CDN.

"That's not to say those advantages will guarantee AT&T success, as we saw Qwest, MCI and other telcos in the market fail with these same advantages years ago," writes Rayburn. "But with Level 3 now becoming a major player in the CDN market and AT&T making a bigger push, it's only a matter of time before the telcos once again try to dominate this market."

It has been speculated AT&T would be moving into the CDN market since December 2007 when a presentation at AT&T's analyst day included a few slides about the company's content delivery build out.