As earlier reported, Excite@Home has signed a deal with Rhythms NetConnections, a wholesale provider of high-speed digital subscriber lines (DSL), giving it access to more than 15 million homes served by Rhythms.
The deal will enable Excite@Home to deliver its Web content to residential customers not equipped with cable modems. The company, which has access to about 60 million U.S. homes via deals with AT&T, Cox Communications, Comcast and other major cable companies, believes the Rhythms alliance will allow it to reach more than two-thirds of U.S. households.
Rhythms' offers a nationwide network of DSL connections that are available to 15.3 million homes in 46 metropolitan cities--such as Seattle, Boston, Denver and San Diego--across the country. The company expects to offer service in 70 major markets by the end of the year, thereby broadening Excite@Home's ability to offer service where its cable partners do not own networks.
Previously, Excite@Home offered DSL service to business customers through its @Work unit, which has a partnership with Rhythms competitor NorthPoint Communications.
The new strategy was first announced in January, although it was lost among news of Excite@Home's first-ever profit and a change in executive leadership. The move allows Excite@Home to broaden its potential customer base while giving Rhythms a major resale partner.
The company already has more than 1 million customers, but the race for high-speed, or "broadband," users is escalating. AT&T, its largest shareholder, recently announced a plan to gain greater control over Excite@Home in hopes of boosting the company's performance. But Excite@Home, which has been at the mercy of its cable partner upgrades for years, wants more network options for delivering content to consumers.
"One of our goals has always been to reach the broadest possible number of subscribers," said Adam Grosser, president of subscriber networks at Excite@Home, adding that the company's intentions have always been "technology agnostic."
Excite@Home executives have said they also would consider deals with other DSL providers, fixed wireless services, and potentially even satellite Net access operators.
Some analysts question whether Excite@Home will be able to keep DSL service costs in line with its $40-a-month cable service. DSL providers such as Rhythms and Covad Communications must lease spare phone lines from the Baby Bells, driving costs higher. Recent legislation has aimed to keep DSL costs lower.
"With DSL providers' services, it's going to be difficult for (Excite@Home) to offer a compelling price to consumers," said Michael Harris, president of Kinetic Strategies, a broadband market research firm.
Excite@Home and Rhythms expect to offer the service commercially later this summer with monthly pricing yet to be determined.
Rhythms also will make a $15 million investment in @Home Solutions, the Excite@Home subsidiary aimed at offering high-speed Net access in smaller markets.