@Home Bolsters Its Own Backbone

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High-speed-data service @Home Network bought itself some
growing room last week, agreeing to uncouple from Sprint Corp. and to instead hitch to
AT&T Corp.'s fiber optic backbone lines.

The 20-year agreement with AT&T for two or more OC-48
lines -- which run at a blistering speed of 2.5 gigabits per second -- gives @Home a
100-fold increase in its backbone capacity, said Milo Medin, its chief technology officer.
Until now, @Home had been using multiple 45-megabit-per-second lines owned by Sprint, he
added.

"We'll have multiple north-south and east-west
paths across the country, structured into approximately 12 rings," Medin said of the
AT&T arrangement, which gets started in March, and which is expected to be complete by
August.

Meanwhile, any progress toward a backbone merger between
@Home and Road Runner -- the high-speed-data service provided by Time Warner Cable and
MediaOne Group Inc. -- appeared to be in a back-burner mode last week.

That's a sharp contrast from the mood this past
summer, when a blended nationwide backbone was viewed by many industry leaders --
including Tele-Communications Inc. president and chief operating officer Leo J. Hindery
Jr. -- as critical. The thinking at the time centered on AT&T's need to extend
its service reach beyond the systems run by TCI and its affiliates.

But last week, Medin said it was hard for him to comment
"on something that really hasn't been a priority."

Over at Road Runner, vice president of network engineering
John Leddy said the service maintains an "open-peering" policy with other
Internet-service providers, but "our priority now is to build large regional
clusters, then increase the backbone capacity based on demand."

One involved MSO executive went so far as to hint that
AT&T's long-rumored telephony deal with Time Warner could include language that
runs Internet-protocol-telephony traffic on @Home's network.

Michael Harris, an analyst with Kinetic Strategies Inc.,
said the @Home/AT&T backbone move marks a shift from AT&T's original
pronouncements when the TCI acquisition was announced in June. At that time, AT&T
viewed @Home as a cable-modem and high-speed-data play only.

"Now it seems like AT&T wants @Home to be its
[vehicle] for an integrated IP play, with voice and data," Harris said.

Medin declined to elaborate on that possibility, describing
the arrangement as "just a backbone deal."

At Road Runner, spokeswoman Sandy Colony said it
hasn't yet been resolved who will provide voice and streaming-video services -- Road
Runner or its individual MSO constituents, MediaOne and Time Warner. "It's under
discussion," she said.

@Home's new arrangement with AT&T gives it a leg
up into points of presence located along the 15,000 miles of AT&T's long lines.

Because those lines already use a technique known as
"dense-wave-division multiplexing," or DWDM, individual fibers can be segmented
for even more capacity, noted Barbara Peda, president of wholesale services for AT&T.
"We believe that this is crucial as the Internet evolves to the next phase of
services," she said.

And in a potential trendsetting move, Medin said @Home will
place broadband routers directly on AT&T's optical network, instead of paying for
layers of expensive SONET (synchronous optical network) and ATM (asynchronous transfer
mode) alternatives used by many long-haul carriers.

"I believe that this is the first pervasive deployment
of this type of technology," Medin said. "We won't put SONET add/drop
multiplexers out there, or ATM, but rather take the fastest routers and plug them directly
into the fiber -- some call it IP on glass," he added.

Medin wouldn't name the router vendors because they
haven't been selected yet, but he said Cisco Systems Inc. and Juniper Networks Inc.
top off the list.

@Home started examining its future backbone capacity a year
ago. Medin complimented Sprint's network as one that worked well in the early days of
@Home, but he said that model wouldn't hold for future growth.

A request for proposals was issued to the carrier community
this past summer. "All of the usual suspects" were included, Medin said, and
AT&T's aggressive bidding won.

Despite AT&T's looming ownership of TCI -- which,
in turn, controls @Home -- Medin said AT&T won the contract on the basis of merit.

"Most people don't use the term 'agile'
to describe AT&T, but, in fact, these guys really were flexible, and they beat out the
other players," he said.

The new backbone configuration means that @Home's
commercial-business sector, @Work, can go after Fortune 500 companies, and not just the
small and midsized business segment, officials said.

For residential users, the benefits will be more subtle and
behind-the-scenes. For example, the new backbone should increase data throughput for
content that isn't cached on @Home's web of servers. Plus, streaming video will
work better, Medin said, without mentioning @Home's 10-minute restriction on
streaming video.

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