AT&T"s U-verse TV system will cost $6.5 billion to deploy by 2008 ($1.4 billion more than anticipated) not to mention that the company has cut the number of homes the service will initially serve by one million. Needless to say, both the decision that AT&T and Verizon Communications(VZ) took regarding utilizing fiber optic cabling to bring TV to customers" home is being questioned. So far, AT&T and Verizon haven"t done much damage to the competition, the cable companies. The head of National Cable & Telecommunications Association"s lobbying unit, Kyle McSlarrow, said AT&T"s TV effort may be stretched too thin because of bandwidth limitations.
McSlarrow conceded that Verizon may be making progress with its Fiber Optic Service product. Verizon"s service brings fiber directly into homes, but the company has been criticized for digging up customer lawns and utility connections. AT&T maintains that its U-verse service has advantages over cable and it is pleased with the progress of the TV deployment. At last count AT&T had signed up just 20,000 U-verse customers. Verizon, on the other hand, says its FiOS TV now serves about 348,000 homes and is offering different FiOS-based packages in 16 states.
Both telephone companies have said their TV deployment has been slowed by requirements by many states and municipalities that specify cumbersome permitting processes. AT&T has an additional challenge to serve the millions of customers it picked up when it acquired BellSouth(BLS).