Excite@Home's largest shareholder, AT&T, plans to replace its 3Com network equipment with alternative technology from rival Cisco Systems in some markets, according to the sources. As a result of the recent network problems, AT&T has offered five months of free Net service in certain parts of Northern California.
Although the scope of its equipment shortcomings remains unclear, 3Com could potentially lose millions of dollars in revenue even if they are confined to the San Francisco Bay Area. In the high-stakes world of network construction, the loss of just part of AT&T's business could be a significant blow to 3Com, a corporate infrastructure company that is attempting to reshape itself around a home consumer strategy to sell its network switching and routing systems.
Several recent data network problems have cast a shadow over the communications industry, with the most recent incident exposing equipment made by Lucent Technologies. Other disruptions have affected users of digital subscriber line (DSL) technology, a phone-based alternative to cable Net service.
In 3Com's defense, sources say, its equipment problems were magnified in Northern California because of unique networking circumstances. For example, too many people using the high-speed network at the same time and the poor quality of some system conduits--formerly owned by Tele-Communications Incorporated--may have contributed to problems that have affected the quality of Excite@Home's service in the region south of San Francisco over the past several months.
Still, 3Com equipment itself--used to connect cable modems to high-speed networks--has been the cause of at least a portion of the service problems, according to sources.
Given the difficult nature of networking, the issue may stem from incompatibilities with previous equipment investments in AT&T's cable system. 3Com's product offers more flexibility for service providers but also is more complex.
Bay Area blues
The recent problems with the AT&T@Home network led to slower-than-expected data transfer speeds and, in some cases, a temporary loss of Internet access for more than 1,000 customers in the Bay Area. Those incidents were marked by the loss of "packets" of information, sent in the downloading of Web pages, and chronic disconnections for a service that, by its nature, is supposed to be "always on."
Michael Pula, director of product management for 3Com's cable access business, said stopgap, "workaround" solutions--including new software and hardware--were put in place in the San Francisco area. Pula confirmed that Cisco cable equipment is being installed next to 3Com's own products on AT&T's network in San Mateo, California.
3Com's woes may also involve differences between the "back-end" networking infrastructure employed by US Robotics--a company acquired by 3Com in 1997--and the modems developed internally at 3Com, sources said.
AT&T began installing 3Com's equipment in its Bay Area network late last year. 3Com executives said that some of their equipment in AT&T's cable network had to be fixed but that the local AT&T@Home service has dramatically improved since equipment in the area was upgraded.
Here comes Cisco
However, sources confirm that Cisco technology will soon replace 3Com equipment in parts of AT&T's sprawling cable network, one of several systems that deliver Net access services from Excite@Home. Cisco, the leading data networking equipment firm, may also become the primary provider of cable equipment for the high-speed service as it expands, they said.
A Cisco spokeswoman declined to comment on possible cable network contract talks with AT&T. Sources, however, said the deal could be disclosed in the next few weeks.
Pula defended 3Com's networking products, saying high-speed Internet access is an emerging market undergoing growing pains. "Transmitting data at these rates over cable has some complexities to which you have to pay some amount of respect," Pula said. "We are jointly working to solve these problems. There's been a lot of cooperation."
Baby steps for Ma Bell
Cable modem standards have only been in place for a few months, Pula said. "We're really talking about a lifespan of three or four months, and realistically that's a short period of time," he said. "Just like a human being growing up, you're going to have different experiences. Will you make the same mistake twice?
"Like anything, 3Com is going to apply what they've learned," Pula said.
A spokeswoman for AT&T's broadband and Internet services division said the company will continue using 3Com equipment in several cities where it is already installed and plans to deploy 3Com products in other markets.
"We continue to work with 3Com and others. We've been active supporters of their products," spokeswoman LaRae Marsik said.
She said AT&T chooses cable equipment on a system-by-system basis, because of the peculiarities of each local cable franchise's network. AT&T has about 600 cable systems nationwide, with more than 80 offering service through Excite@Home.
Marsik said AT&T's cable unit has replaced 3Com equipment in some markets but has done the same with other suppliers' equipment as well.