Excite@Home, reversing a short-sighted decision made last week, agreed Tuesday to let its cable partners Comcast and Cox Communications sign up new Net access subscribers while the company continues to reorganize under bankruptcy. The company added AT&T Broadband to the list Wednesday.
Last month, Excite@Home filed for Chapter 11 bankruptcy protection. Last week, the company said it would stop taking new customers to conserve cash.
The upshot of so much wrangling over future customers is that Excite@Home may alienate its biggest potential asset: a subscriber base thirsty for faster Net connections. The company says 38 million homes have access to the Excite@Home cable modem service and it has exclusive rights in the near-term to a total of 64 million potential subscribers. Those numbers indicate vast potential for a company that--with 3.7 million subscribers--is already the "AOL" of the broadband world, with by far the largest market share in high-speed Net access.
"Clearly, the concept of broadband Internet is not only the current wave, but the wave of the future," said Dan Calic, founder of the @Home User Group, based in Fremont, Calif.
Two recent events hint at the perils of any hiccups in attracting new customers to Excite@Home's cable Net access service. For one, Microsoft signed deals with Baby Bells Verizon Communications, BellSouth and SBC Communications to offer its MSN service over their high-speed digital subscriber lines (DSL). The company already has a similar partnership with Qwest Communications International.
Second, both AOL and partners that plan to use AOL Time Warner's cable systems, such as EarthLink, have also announced the availability of cable modem-based Net access services in various cities at a rapid pace. AOL also has ambitious plans to use DSL providers to extend the reach of its Net service.
Calic says the biggest issue for the consumer is to have a "viable choice" in high-speed Net access--an aspiration that could grow dimmer with Excite@Home's fits and starts.
With Excite@Home's cable partners claiming they won't extend contracts to provide high-speed service after they expire next summer, a dizzying array of fiscal issues could arise for an outfit already in the throes of bankruptcy. This is further complicated by ongoing talks between Comcast and AT&T concerning a sale of AT&T Broadband, which would logically leave a former partner in control of the beleaguered Excite@Home.
What may save Excite@Home and its cable partners in the short term is the lack of competition in each market in the cable industry. If one company has a large network in a certain region of the country, likely competition comes from other sources, such as DSL providers or wireless network operators, rather than other cable systems.
The consumer, meanwhile, will likely continue to be left to twist in the wind while the so-called Broadband Revolution continues to contract and morph at a baffling rate. In fact, amid these boardroom maneuverings, I just received a promotional flier from AT&T and Excite@Home at my home in the Bay Area urging me to sign up.
I'm just as confused as anybody.