@Home Affiliates Buy Breathing Space

Author:
Updated:
Original:

With 90 days until the doors are locked for good, remaining Excite@Home Corp. cable affiliates received a critical OK from a U.S. Bankruptcy Court judge last week that will ease their transition from the failed cable-modem network.

Judge Thomas Jackson — with the blessings of creditors and bondholders — approved some $355 million in interim contracts signed by Cox Communications Inc., Comcast Corp., Insight Communications Co., Mediacom Communications Corp., Midcontinent Communications and Canada's Rogers Cable Inc.

Charter Communications Inc. was a late addition. It signed a contract on Dec. 12, ensuring continued Excite@Home access for its 14,200 customers in the Pacific Northwest. Jackson must also approve that contract.

AT&T Broadband, Adelphia Communications Corp. and @Home Solutions customers Eastern Cable and Susquehanna Communications did not agree to the contract terms, and their service was shut off the week of Dec. 1.

About 40,000 Adelphia customers had not been switched to the MSO's in-house PowerLink service. Service to those homes was cut Dec. 3, but Adelphia later switched these customers to PowerLink.

The MSOs that did sign the 90-day contracts — at a price ranging from $160 million for Cox and Comcast to less than $1 million for Charter — will maintain access to Excite@Home's network through Feb. 28. After that, the Redwood City, Calif.-based high-speed Internet-service provider plans to shut down.

Excite@Home's dismantling process has already begun. Last week, the company said it had let its public-relations team go, and redirected all press inquiries to vice president of marketing Jennifer Doyle.

Meanwhile, the MSOs that still use @Home's infrastructure will begin moving customers to their own cable-modem networks. Those subscribers will receive new electronic-mail addresses with a different domain name, but during the transition period, they'll still be able to access their @Home accounts.

When it debuts its high-speed-data service later this month, Comcast plans to add several new features, including remote access to e-mail accounts, 25 megabytes of network-based data storage per subscriber and easier management tools for its 792,700 cable-modem customers.

"Today's ruling is a win for our customers because their access to @Home e-mail and the Internet will remain uninterrupted throughout the seamless transition from @Home to our new Comcast High-Speed Internet network," said Comcast cable unit president Steve Burke in a Dec. 11 statement. "Our ability to add new subscribers also remains uninterrupted."

Cox has pretty much hammered out its network and migration strategy, said MSO senior vice president, strategy and development Dallas Clement. The MSO will begin shifting its 550,000 Excite@Home customers in the last week of December under a fairly aggressive schedule.

"If we were actually transitioning customers much into the late part of February, we would stand to be at some risk," Clement said. "As you get into February, we want to be pretty much done."

In addition to adding the hardware and systems needed to support the service, the Atlanta-based MSO has selected a backbone provider from among a number of candidates, Clement said. It has not disclosed the company's name, though.

"There's Level 3 [Communications Inc.], AT&T [Corp.], MCI — there's a number of second-tier folks that have come in to talk to us," he said. "It's actually quite easy, in that there is a lot of excess fiber out across the United States that connects into our major markets, and they all have peering points into the Internet, so you can get the price points down pretty significantly."

Cox also has benefited from favorable equipment deals. Hurt by the economic downturn, major vendors "are bending over backwards to give us great deals," Clement said.

That's contributed to projections that Cox will be able to run the cable-modem service more economically than Excite@Home. The 35 percent cut @Home took to run the service amounted to $13 per subscriber; Cox expects to spend $7.50 per home. Comcast released similar estimates last week.

"So right away, that is more efficiency in operations, and it doesn't include in any way the fact that we can leverage this platform," Clement said. "There are a whole host of things that we can do that Excite@Home could have done, but they were never focused on the MSO as a customer to work with us to bring those opportunities to market."

As with Comcast, Cox also plans to offer customers remote access to e-mail — something Excite@Home refused to do.

"They didn't provide that, and that's one of the leading complaints our customers have," Clement said. "We heard loud and clear that customers wanted that."

Cox Interactive Media — a joint venture of the MSO and sister company Cox Enterprises Inc. — will provide content. CIM has developed a raft of community portals in all of Cox's major markets.

Cox will assemble a generic home page for smaller markets.

Some Cox customers use Road Runner high-speed data service or the older, in-house Cox Express service; the MSO plans to shift them to the new service as well.

"Our plan is to move both those sets of customers to our new platform as soon as reasonable after the Excite@Home conversion," Clement said.

Related