Commentary: Excite@Home woes may spur open cable

By Jay Pultz, Gartner Analyst

Excite@Home is at a crossroads, and its @Home customers may suffer service disruptions as the struggling Internet-access company fades, slowly digs itself out of a big financial hole or finds a rescuer.

However, it is really Excite@Home's less-obvious @Work business customers who will be hit the hardest and must take immediate action.

	See news story: Excite@Home survival chances dim

In addition to offering Internet services to consumers in the home, the company provides DSL (digital subscriber line), Web hosting and high-speed Internet-access services to small, midsized and large businesses. These @Work business customers must formulate immediate backup plans in case a reorganization or acquisition interferes with Excite@Home's ability to provide these services.

Fortunately, these business customers have a little bit of time to put contingency plans in place; businesses that had relied on now defunct Northpoint Communications and Rhythms NetConnections did not have such a luxury. Regardless, @Work customers must act now.

Consumers of the @Home service wouldn't need to take quite as much initiative if the company were to fade, because Gartner believes that major service operators, such as AT&T, or cable Internet service providers would assume and then continue to provide Excite@Home's consumer services, with some--albeit not major--service disruption.

Despite the uncertainty created by the woes befalling broadband-service providers, there could be some positive changes in how cable data services are provided. An interesting speculation is that Excite@Home's demise could lead to "open cable" sooner, and to a greater degree. For example, if Excite@Home is broken up, major service operators may choose to hedge their bets and work with more than one broadband Internet service provider. In so doing, they would give their subscribers a choice--and potential regulatory actions may force them in this direction anyway.

One possible rescuer for Excite@Home is AT&T Broadband, which owns a controlling stake in the company. But even AT&T is limited with what it could do at this point--particularly since it is already planning to spin off its broadband unit, possibly to a cable operator such as Comcast. This raises the obvious question: Why would AT&T want to invest in something it is looking to divest itself of?

(For a related commentary on certain vendor dynamics in the cable-modem arena, see Gartner.com.)

Entire contents, Copyright ? 2001 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.