AT&T plans to pay for Excite@Home's problems
Although it may be easy to promise blazing data transfer speeds over high-speed networks, Excite @Home is finding that it's much harder to deliver.
Some of Excite@Home's high-speed Internet users in the San Francisco Bay Area have experienced slow download speeds or have had no service at all since early May, according to a spokesman for AT&T's cable unit.
This isn't the first time the company has struggled with the speed of its service. Now AT&T, Excite@Home's largest shareholder, is prepared to offer five months of free service to more than 1,000 San Francisco Bay Area customers for the high-speed Net service's latest snafu.
The move is a bold one for Ma Bell, indicating how serious the telecommunications giant is about broadband Net access. It also shows a willingness by AT&T to step in when its various ventures are not performing up to expectations.
Although AT&T and Excite@Home are two distinctly separate companies, the relationship has been strengthened by Ma Bell's newly acquired dominance the cable industry and its desire to create integrated service bundles of voice, video, and data.
Certainly, high-speed Net access is a key part of AT&T's attempts to become a one-stop shop for consumers. But Excite@Home's problems could undermine AT&T's reputation, at least with some customers.
"In the end, AT&T has to step in because they're being associated with some of these issues," said Michele Pelino, an analyst at The Yankee Group. "[AT&T is] somewhat on the hook to solve some of these problems whether they're directly involved or not.
"They're showing that they value this technology and the customers that use it," Pelino said.
The most recent problems are part 
of a growing list of
concerns for Excite@Home, the nation's leading cable
modem service. With more than 460,000 customers, the Net-over-cable company
is perhaps the most visible representative of the booming market for
broadband Internet access.
The company boasts of download speeds between 1 mbps (megabits per second) and 3 mbps. Yet customers have complained that what the company promises is not exactly what is being delivered.
For example, many users in a test market in Fremont, California, faced sluggish speeds for about two weeks last year. Similarly, thousands of users in Hartford, Connecticut, also struggled with slow service in January after what the company called a "larger than anticipated growth in network traffic."
The latest speed problems come amid growing user concern over Excite@Home's plans to intentionally cap upload speeds to improve service.
An AT&T apology
More than 1,000 Excite@Home customers in six communities south of San
Francisco will be credited for fees paid in May and June, AT&T Broadband &
Internet Services spokesman Andrew Johnson said today. The service, locally
called TCI@Home, costs about $40 per month.
In addition, users in the California communities of San Mateo, Belmont, San Carlos, Cupertino, Milpitas, and Los Gatos will get free service through September 30 while the company determines the cause of the network problems. The five months of free service, first reported by the San Jose Mercury News, is reportedly expected to cost AT&T more than $200,000.
Yet the company can't figure out why the high-speed Net-over-cable service isn't working properly for some users.
"We don't know in essence," Johnson said. "We just know it's not running the way we want it to."
The first reports of trouble appeared in early May, Johnson said. Since then, about 50 formal complaints have been filed with AT&T.
Johnson said the latest problems are not related to Excite@Home's new ONAdvantage program, which caps upload speed limits at 128 kbps (kilobits per second). The ONAdvantage program, intended to improve overall performance for most users, has been in place in the San Francisco Bay Area since February, he said.
A speed cap
Company executives and analysts have said few users would even notice the
ONAdvantage limits. The new cap is intended to prevent abusers of the
service from impacting the performance of the networks for other regular
users. Because many users share a certain amount of bandwidth on a cable
network, a handful of customers could conceivably dominate the service
without direct controls.
But the speed limits have drawn the ire of many users, some of whom believe they are being short-changed by Excite@Home.
CNET News.com has received numerous email messages from upset users about the new speed caps.
"The ONAdvantage 'enhancement' is not an enhancement, it is a decrease in service. Is it unreasonable to expect a price reduction as a service is degraded?" wrote Andy Burdulis, a Comcast@Home subscriber in New Jersey.
AT&T defended the upload speed limits on its high-speed Net offering. "It is certainly not a bait-and-switch. That's a gross mischaracterization," Johnson said.
The company has said it is even considering offering a new level of service--and new pricing--which would come with faster upload speed guarantees.
"I find it quite convenient that at the same time they are slowing down the service, they are preparing a new 'professional' service to sell us back what they originally sold us, then took away," wrote Martin Blackstone, an @Home subscriber in Tustin, California. "I paid $150 to get this service and now they are taking it away."
Although Excite@Home says they alert users with an email, many customers claim they were unaware of the upload limits.
"It's a shame that they decided to implement these changes and try and hide them from their customers," wrote Mark Hewett, a Cox@Home customer in Omaha, Nebraska. "If only they had kept us properly informed, people would be a lot less upset right now."