Judge orders AT&T to halt U-verse construction in San Francisco

AT&T (Nasdaq: CMCSA) has been blocked from installing 726 utility boxes for its U-verse TV and Internet services in San Francisco, after a local judge concluded that there is a "fair argument" that the refrigerator-sized boxes would have an adverse impact on the community.

U-verse utility box (Image source: San Francisco Beautiful)

Responding to a lawsuit that was filed in August by neighborhood associations that complained the utility boxes were an eyesore, San Francisco Superior Court Judge Harold Kahn ordered a stay of the city's approval to allow AT&T to expand the rollout of its IPTV service in the city. Kahn ruled that installation of the U-verse pedestals--which measure 4 feet by 4 feet, and are 2 feet deep--must be put on hold until the city conducts a comprehensive study about their environmental impact.

While the ruling will likely only result in a temporary delay of AT&T's U-verse expansion in San Francisco, it's a setback for the telco, which has gained momentum in subscriber growth for the IPTV-based service. AT&T reported earlier this month that it picked up 176,000 U-verse customers during the third quarter. San Francisco is one of the largest cities to issue AT&T a franchise for U-verse TV. According to Nielsen, the San Francisco-Oakland-San Jose DMA is the sixth largest market, with 2.5 million TV homes.

The ruling is good news for incumbent San Francisco cable provider Comcast (Nasdaq: CMCSA), which won't have to compete with U-verse TV pricing until AT&T is allowed to resume expansion in San Francisco.

For more:
- San Francisco Business Times has this story

Commentary: Utility cabinets are a necessary nuisance for fostering broadband competition

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