Talks aim to keep fast Excite@Home Internet service on for most cable co.’s

By Brian Bergstein The Associated Press
Tuesday December 04, 2001

SAN JOSE — Bankrupt Excite@Home reached a tentative deal to keep its fast Internet service up and running for many of its subscribers but not those with AT&T Broadband, which scrambled Monday to restore access for 520,000 accounts. 

Excite@Home and some cable companies signed a nonbinding letter Sunday that ensured a service extension, at least temporarily. Talks on a definitive agreement continued Monday. 

Those negotiations had begun even before Friday, when a federal bankruptcy judge let Excite@Home cancel “clearly burdensome” contracts with cable companies. ExciteAtHome said the deals were costing the company up to $6 million per week. 

Excite@Home, whose Internet access service had 3.7 million subscribers in North America, severed connections for more than 850,000 AT&T Broadband customers Saturday after the two companies failed to reached agreement. 

By Monday, AT&T said it had moved about 330,000 of those subscribers, mainly in Oregon, Washington and the Dallas area, to its own network and restored their Internet access. 

Next in line were more than 300,000 customers in Illinois and the San Francisco Bay area. 

After losing her Web access Saturday, Rita Cherry, 76, of Livermore, awoke Monday to see the telltale green lights had returned to her cable modem. Her first check of the Internet featured a welcome message from AT&T about its new network. 

“I felt something was going to happen pretty quick because otherwise, too many people are going to lose money,” said Cherry, who finds her high-speed Web access essential to her work as a tax preparer. 

Steve Lindemann, 45, of Redmond, Wash., was switched to the new network Sunday and noticed no difference in its performance. 

However, he and his wife, Allyn, noticed that e-mails sent to their old “@Home” address were not being forwarded to their new AT&T-supplied e-mail account. 

Customers in Denver and Salt Lake City were due to be plugged into AT&T’s new network Wednesday; people in Hartford, Conn., Pittsburgh, Sacramento and Rocky Mountain cities on Thursday; Michigan on Friday. 

AT&T asked customers to remain patient, saying its employees were “working literally around the clock.” Once service is restored, AT&T said, customers will get two free days of Internet access for every day they were down. 

Service to other cable companies that sell Internet access through Excite@Home’s network were not cut off. 

One of the largest, Cox Communications Inc., was part of the group that reached a tentative deal Sunday with Excite@Home. That arrangement is considered a stopgap measure until Cox can begin moving its 550,000 Excite@Home subscribers to its own high-speed network this month, spokeswoman Laura Oberhelman said Monday. 

Similarly, St. Louis-based Charter Communications Inc. had been using Excite@Home to provide cable Internet access to 145,000 subscribers, but in hopes of assuring stability in the service, it is moving 90 percent of them onto a Charter-run network. 

The remaining 14,000 Charter customers on the Excite@Home service are in the Pacific Northwest. Charter was not part of the group that struck Sunday’s deal, but was continuing to negotiate with Excite@Home, Charter spokeswoman Deb Seidel said. 

Excite@Home spokeswoman Estela Mendoza declined to comment Monday. 

The Redwood City-based company has sought to exact higher payments from cable companies to connect to its network. Excite@Home and its bondholders hope to prove the network is worth substantially more than the $307 million AT&T has offered for it. 

AT&T, which owns 23 percent of Excite@Home, surrendered its majority representation on the company’s board in October, hoping to avoid criticism it had engineered the company’s bankruptcy so it could buy the cable access network at a steep discount. 

The latest developments appeared to make it unlikely that AT&T would maintain its bid for the network. An AT&T Broadband spokeswoman declined to comment. 


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