High Speed Access Makes Low-Key Exit

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Compared with the flameout of larger data-over-cable peer At Home Corp. — and those of countless other telecom providers over the past few years — High Speed Access Corp. moved into the history books quite quietly last week.

HSA, which last September agreed to sell its high-speed-data provisioning assets to Charter Communications Inc. for $81.1 million in cash, closed the deal last Thursday with a shareholders' vote and an exchange of signatures in a New York law office.

Charter agreed to retire about $75 million in series D preferred stock, and HSA agreed to buy back 20.2 million of its shares owned by affiliate Vulcan Ventures Inc. for 22 cents each, or about $4.4 million.

HSA CEO Dan O'Brien said the company would end up with $40 million to $60 million in cash when the dust settles.

HSA was created in April 1998 by the merger of HSAnet, a Littleton, Colo.-based high-speed data provider, and Louisville, Ky.-based CATV.net. It was a turnkey provider, which meant it did most of the work involved in introducing cable-modem service into a market, in exchange for a revenue split with the operator.

The data-over-cable provider went public in June 1999 at $13 per share and rose as high as $47 apiece in 1999. Shares slid as the dot-com bubble burst in late 2000 and 2001, and were worth 78 cents each on Feb. 28.

In addition to Charter, HSA provided service to about 57 MSOs in small systems across the country. Those MSOs shifted to other providers in November. HSA also had some international business from which it recently withdrew, O'Brien said.

An inability to raise money for a capital-intensive business took its toll on HSA. So, last July, when Charter, its biggest customer, made an unsolicited offer to buy the Charter-related assets for $73 million, HSA was all ears. It managed to get the price up to $81.1 million before agreeing to sell.

O'Brien said HSA is evaluating three options: distributing the cash to shareholders and liquidating; investing proceeds back into the company; and distributing the cash to shareholders as a dividend without liquidating the company. A decision would come in the next couple of months, he said.

HSA, which had no debt, faded away quietly partly because it didn't have any bondholders to appease, O'Brien said. But not everyone walked away with a smile, he conceded.

"People who bought the stock at $13 aren't happy, when it's worth $1.50," O'Brien said, assigning a per-share value to its cash.

But, he added, "On a relative basis, and looking at what's happened in the sector and the economy, astute financial investors have understood that what we've done has salvaged value out of a very difficult business at a very trying time."

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