AT&T tells the Wall Street Journal (non reg version) they may spend $1.4 billion more on U-Verse VDSL IPTV deployment than previously reported, while decreasing their overall deployment target by one million customers. AT&T says they hope to pass (not serve) 18 million subscribers by 2008 at a cost of $6.5 billion. The service currently passes 2.8 million homes but only has slightly more than 20,000 subscribers. The WSJ explains the spending hike:

"AT&T blamed the price increase in the cost of adding more servers, which are needed as the company significantly increases the amount of high-definition channels it plans to offer. AT&T is also paying a premium to its equipment vendors to ensure gear is on hand when needed, the company said. The ballooning cost of U-verse comes at a time when AT&T is finally gaining a little traction in its efforts to launch the long-delayed service."

The company has launched U-Verse in 18 major markets (most recently the Los Angeles area). Some clunky Microsoft code and bug squashing was thought to be the cause of some deployment delays late last year. By comparison, Verizon is spending some $23 billion on their FTTH FiOS deployments.