AT&Thas 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.

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, which won't have to compete with U-verse TV pricing until AT&T is allowed to resume expansion in San Francisco.