Excite@Home Shuts Down Network in AT&T Markets

The long-running stalemate between AT&T Broadband and Excite@Home finally came to a head this weekend when more than 600,000 AT&T customers lost their cable-modem Internet connections after Excite cut off AT&T from its network. Excite@Home had been locked in bankruptcy court and was negotiating with cable-access providers such as AT&T, Comcast, and Cox Communications to keep its networks up and running. The company reached tentative deals with Comcast and Cox, but was unable to do so with AT&T. As a result, 850,000 AT&T customers who access the Internet through Excite's network were dropped Friday. But AT&T, which had been working to build its own networks in those areas, was able to restore connections immediately for about 250,000 people. The remaining 600,000 customers should be back online within 10 days, the company says.

Excite's other customers might soon find themselves sans Internet access because the company's creditors have yet to support Excite's deals with Comcast, Cox, and other companies. Currently, more than 2.7 million people in North America access the Internet through Excite's high-speed network. And the company, which recently filed for bankruptcy protection, says that its current fees--about $16 a subscriber--are woefully inadequate. Excite would like the cable companies to pay it $50 per subscriber for the next 9 months. AT&T equated the fee with blackmail and refused to pay. So Excite got bankruptcy-court permission to turn off the connection for those AT&T customers who use its network.

If Excite@Home doesn't get a permanent deal soon, however, the company might not survive. Virtually all the cable companies that use Excite's network infrastructure are building their own high-speed networks to replace Excite, and some--including AT&T's--will be completed by the end of the week. AT&T says it began work on the networks as soon as Excite filed for bankruptcy.

In the meantime, hundreds of thousands of people found themselves without any Internet connection or with a slow dial-up line. In cases like this, you don't appreciate what you have until it's gone.