Excite@Home service could cease

If Excite@Home creditors had their way, the high-speed cable internet service would shut down this weekend, to keep the network from burning any more cash while debt holders negotiate with AT&T Broadband.

          If Excite@Home creditors had their way, the high-speed cable internet service would shut down this weekend, to keep the network from burning any more cash while debt holders negotiate with AT&T Broadband and other cable operators for better financial terms in a reorganisation or buyout.

          Excite@Home briefly stopped hooking up new customers after it filed for protection under Chapter 11 of the US Bankruptcy Code in September. It reached agreements with its largest cable partners--Cox Communications, Comcast Cable Communications, and Rogers Cable -- to restore internet service deployment, but those agreements expired Friday (US time).

          Creditors of the bankrupt service provider seek to shutter the company to conserve capital while trying to better a $US307 million buyout offer from AT&T. Most of AT&T Broadband's approximately 1.35 million customers get internet service through Excite@Home, an AT&T spokesperson says. Excite@Home's management opposes efforts to shut the network down, as does AT&T, she says.

          Some of the cable companies that rely on Excite@Home equipment and network management services to provide their own internet service are scrambling to reassure customers. Among the 21 companies that contract with Excite@Home are AT&T Broadband, Comcast, and Cox Communications.

          Insight Communications in New York sent email to its customers saying it does not believe the system will go down. "We are working on a number of fronts to prevent this from happening, including direct motions in the Court," says Kim D Kelly, executive vice president and chief operating officer, in a message that is also posted on the company's website. Insight is also exploring options with other ISPs to ensure continued service for its customers, Kelly says.

          Several other companies' sites are offering information on back-up access services. Excite@Home's own site did not refer to any possible problems.

          The Excite@Home bankruptcy carries shades of the NorthPoint Communications Group DSL (digital subscriber line) shutdown in March of this year. NorthPoint's demise abruptly cut off tens of thousands of customers--mostly small businesses--from their high-speed Internet connections. California regulators moved to block the shutdown, demanding a 30-day warning period and exhorting service providers to make alternative arrangements in haste.

          The impact of an Excite@Home shutdown is significantly greater than NorthPoint's. Excite@Home reported 4.2 million residential broadband customers nationwide in its third quarter earnings report this month.

          AT&T will keep Excite@Home alive if its bid is accepted and approved in another federal bankruptcy court hearing next week in San Francisco. AT&T already holds about a 38% ownership in Excite@Home, with voting interest of 79%.

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