@Home considers Road Runner pairing
A senior executive with the high-speed cable Internet access provider says the door may be open for a deal with Road Runner, another entrant in the market.
Executives from @Home said in an interview with CNET News.com that it would make more sense for the duo to cooperate and tackle the booming market for high-speed Net access together, rather than remain independent companies.
A pairing--either through a cooperative marketing effort or a traditional merger--might make even more sense given both firms' ties to communications giant AT&T.
Senior @Home executives appear amenable to a deal.
"I can't imagine it not happening," said Charles Moldow, vice president of sales and marketing for @Media, the company's content unit.
Speculation has swirled around a possible deal since AT&T earlier this week agreed to form a joint venture with Time Warner, parent of Road Runner.
AT&T, via its proposed acquisition of Tele-Communications Incorporated, will soon own a controlling stake in @Home, as TCI is the largest shareholder in the company.
Time Warner, meanwhile, is the leading cable partner in Road Runner, a joint venture that includes MediaOne Group, Microsoft, and Compaq Computer.
@Home's Moldow said it would make sound business sense for his company and Road Runner to work together to jointly market the cable service, and use just one Internet Protocol-based backbone network.
"It doesn't make sense to have two national backbones. The economics are better for there to be just one," Moldow said. "It would seem to make a lot of sense to put these things together."
Because the two companies have different cable operator partners, the services do not compete for subscribers. Road Runner customers are not able to sign up for the @Home service, and conversely, @Home subscribers can't join Road Runner.
But Moldow said political differences in the cable industry could affect any potential pairing, although he added that the two companies are not specifically in merger talks. @Home and Road Runner held negotiations in the past about possibly working together, but, according to analysts, MediaOne halted those discussions.
Nevertheless, executives said that the opportunities for cable operators to get involved in Internet access are so large that it doesn't make sense to remain isolated. "We don't want to cut anyone out of this opportunity," said Dean Gilbert, senior vice president and general manager for @Home.
The company is fresh off its proposed $6.7 billion acquisition of Net directory Excite. The deal is the largest in the short history of the Internet.