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More deals for Excite@Home, partners

Two more cable companies announce transitional deals with the company, continuing the piecemeal shutdown of the high-speed Internet provider.

4 min read
Two more cable companies announced transitional deals with Excite@Home on Tuesday, continuing the piecemeal shutdown of the high-speed Internet provider.

New York-based Insight Communications agreed to pay Excite@Home $10 million to provide 75,000 customers a transition to other cable providers over the next three months. Insight, the ninth-largest cable operator in the United States, serves customers in mid-sized markets in Illinois, Kentucky, Indiana and Ohio.

Insight said it will work with Excite@Home to switch its customers to independent Internet service providers (ISPs). Insight is "exploring the implementation of multiple ISP platforms for its customers in the future" but will not be transitioning all of its customers to an Insight owned-and-operated network, unlike other large cable companies that have been building out their own networks for months in anticipation of an Excite@Home collapse.

Middletown, N.Y.-based Mediacom, the eighth-largest cable company in the United States, also announced a deal Tuesday with Excite@Home. According to that agreement, Excite@Home will provide Mediacom customers with Internet connections for three months--the amount of time expected for Mediacom to transition those customers to its own network.

Mediacom will pay Excite@Home $10 million under the terms of the agreement, which must be approved by a bankruptcy court judge. According to the contract, Excite@Home will assist Mediacom as it builds an independent high-speed cable network.

Coudersport, Penn.-based Adelphia Communications is also expected to announce a final contract with Excite@Home as early as Tuesday, said Excite@Home spokeswoman Londonne Corder.

The largest four cable partners of Excite@Home have already either signed short-term contracts or have terminated service with the Redwood City, Calif.-based Internet access company. The new short-term deals with Comcast, Cox Communications, Rogers Cable and Mediacom, as well as the swift migration of customers to independent networks, severely erodes the value of Excite@Home's cable assets.

The company is moving into a "transitioning" phase over the next three months, said a source close to Excite@Home, during which time it will spin off its assets to its cable partners. On Tuesday, AT&T withdrew its $307 million bid for Excite@Home's cable assets, and no new bidder has emerged.

Excite@Home, which declared bankruptcy Oct. 1, provided Internet connections to 4.1 million customers and controlled 45 percent of broadband subscribers in the United States as recently as one week ago.

But on Friday, a bankruptcy judge ruled that Excite@Home could renegotiate its contracts with cable companies. The partners threatened that such a move would force them to abandon Excite@Home as quickly as they could switch customers to their own networks.

Negotiations with AT&T broke down almost immediately after contracts expired at midnight on Friday. Excite@Home terminated service to 850,000 customers it shared with AT&T, Excite@Home's largest partner, early Saturday morning. AT&T began to switch customers from the Excite@Home network to its own AT&T Broadband Internet system--a move that AT&T says will take no longer than one week.

On Monday, three major cable companies finalized short-term agreements with Excite@Home, ensuring high-speed Internet access to more than 1.7 million customers and sealing the company's fate.

Philadelphia-based Comcast and Atlanta-based Cox each agreed to pay $160 million to Excite@Home for three months of high-speed Internet service. Those agreements will replace the existing contracts, which had the cable partners paying Excite@Home monthly subscriber fees.

Toronto-based Rogers also announced Monday that it reached a three-month "transitional agreement" with Excite@Home in the United States. Rogers has converted about 70 percent of its 425,000 Excite@Home customers to its own network, and it will convert the remaining 30 percent "as quickly as possible." Rogers, Canada's largest cable company, announced Tuesday that it will pay $15 million for three months of service.

Charter is still in negotiations with Excite@Home for 14,000 customers in the Medford, Ore., and Kennewick, Wash., regions. Those customers still have Excite@Home service, but Charter is in the process of switching them to Charter Pipeline, its independent network. Charter has already switched 131,000 former Excite@Home customers to Charter Pipeline.

Smaller Excite@Home partners, including Canadian companies Cogeco and Shaw, have not yet reached agreements with the company. Many say they are still in negotiations, and service to more than one million customers of the small cable partners continues uninterrupted. Many of the smaller providers may also transfer Excite@Home customers to their own networks.

Separately, AT&T announced Tuesday that it had finished migrating customers in metropolitan Chicago to its high-speed network. That boosts the total number of customers that AT&T has switched to the AT&T Broadband Internet system since early Saturday morning, when contract negotiation between Excite@Home and AT&T broke down. On Tuesday morning, less than 60 hours after Excite@Home terminated service to AT&T, AT&T had transferred about 500,000 of its 850,000 stranded customers.

But customers are still reporting problems, including failed connections and slowdowns. After customers are switched to the AT&T network, they must still log on and configure the service for the new AT&T Broadband Internet service and WorldNet content. They must also inform contacts of their new e-mail address, which has been switched from (username)@home.com or (username)@home.net to (username)@attbi.com.

AT&T is phoning customers and delivering a prerecorded message advising them of the migration and providing brief instructions on the new logon. AT&T is also giving customers two days of credit for every day they are without high-speed service.