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AT&T Interactive is launching a contest today to encourage online and mobile application developers to use its APIs to build new uses for local business data. ATTi is trying to tap into the collective creativity and brainpower of the developer community to extent the reach of its online and mobile advertisers.

ATTI’s main products are its online directory and YP Mobile app, as well as its local ad network, which currently features about 300 partners. ATTi is offering developers access to 17 million local business listings across 4,600 categories.

While ATTi’s products have extensive reach, Joanna McFarland, ATTI’s VP, Publisher Network, acknowledges, “There are still a lot of consumers we are not reaching.”

In addition to extending reach, ATTi wants to promote innovation in local. “We are interested in seeing what new use cases emerge for local business data.”

Those who participate in the YP Developer Challenge will compete for the chance to win $5,000 plus a sponsored trip to the SXSW Trade Show, March 12-15, in Austin. McFarlane says the winner will share a booth at the show with ATTi. ATTi has also launched a YP Developer Center portal.

In Canada, Yellow Pages Group did something similar with its developer program, which encouraged developers to build new local applications with Yellow Media’s data. See this video for more on how Yellow Media works with developers.

McFarlane acknowledged the similarity to Yellow Media’s efforts. She noted that ATTi is minimizing the requirements around using its data to eliminate barriers to participation. While ATTi will require attribution of the data, it will not require link backs or other common restrictions.

When asked about monetization, McFarlane said only that ATTi’s has some ideas it wants to try out with developers later this year, but for now its focus is on unleashing the developer community’s creativity and assessing the results.

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