HSA Severs DSL Plans


One week after receiving an unsolicited bid from Charter Communications Inc.,
High Speed Access Corp. said Thursday that it has discontinued plans involving
digital-subscriber-line technology and it is putting its Web-hosting and
management firm up for sale.

CEO Dan O'Brien, speaking during a conference call with analysts and
reporters, said HSA's current goals are to conserve its cash and to scale back
or completely exit businesses with no immediate or short-term profit

HSA's most recent DSL strategy was to snap up dormant equipment for cents on
the dollar and to collaborate with operators on selling the service directly to
businesses and homes without access to cable-modem technology. Today, HSA is in
the process of selling off its existing DSL assets.

To further reduce its cash burn, O'Brien said, HSA is trying to sell Digital
Chainsaw, a Web-hosting and design firm it purchased in October 2000. Until a
sale is finalized, Digital Chainsaw will close down its Web-development
activities but continue to offer Web-hosting services.

Last week, Charter offered to buy a portion of HSA's assets and MSO contracts
for roughly $73 million in cash and assumed debt. That portion only includes HSA
assets that support Charter systems.

O'Brien noted that HSA has formed a special committee to explore its
strategic options and it has hired Lehman Bros. Inc. and Weil, Gotshal &
Manges LLP -- two companies not affiliated with Charter or Vulcan Ventures Inc.
-- for financial and legal advice.

O'Brien reiterated that HSA plans to scrap its remaining 'turnkey' contracts
with cable operators. At the end of July, non-Charter systems represented about
500,000 homes passed and roughly 20,000 cable-modem service subscribers.

Insight Communications Co. Inc.'s system in Columbus, Ohio, represents HSA's
only non-Charter affiliate that's not operating under a turnkey model -- a cost-
and revenue-sharing structure that has proved to be inequitable for cable
Internet-service providers and one that eventually led to the demise of SoftNet
Systems Inc.'s ISP Channel unit.

HSA is also moving forward on its three-year infrastructure-consulting deal
with Kabel NRW in Germany, which covers items such as network design, service
provisioning and Web hosting. And the company is awaiting regulatory approval
for its third-party ISP agreement with Time Warner Cable, O'Brien said.

HSA also disclosed that it had $56.5 million in cash and short-term
investments as of June 30 -- enough to fund it through the first quarter of 2002, but not enough to
fully fund its business plan through to profitability.

For the second quarter, HSA reported net revenue of $9.3 million, up 237
percent versus the same-year period. The company finished the quarter with a net
loss of $34 million, or 58 cents per share, and 176,000 subscribers, up 26
percent from the previous quarter.