MSOs Prod @Home on Service Woes

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AT&T Broadband & Internet Services and other cable
affiliates of Excite@Home Corp. met with executives of the cable-modem service in Denver
last week to gripe about continuing service problems.

Slow data speeds, packet loss, delays in service
activations and other problems have been an issue in a number of @Home markets for some
time. AT&T Broadband executives said cable operators used the meeting -- the latest in
what have been regular "summit" gatherings -- to convey the urgency they feel
about resolving them.

Besides AT&T Broadband and Excite@Home, the meeting was
attended by executives from Cox Communications Inc., Cablevision Systems Corp., Comcast
Corp. and Canada's Rogers Communications Inc.

AT&T Broadband acting CEO Dan Somers and others said
they believed it was imperative to be the first to market in major cities with cable-modem
service, given the onslaught of marketing and creeping availability of rival
digital-subscriber-line offerings from telcos and resellers.

He also said Excite@Home realized that improvements were
imperative in order for the service to load as many broadband customers as possible before
its exclusivity arrangements with AT&T Broadband and others begin expiring in 2002.

"I think [Excite@Home president] George Bell realized
that there's a 'tick, tick, tick,' going," Somers said. "I
believe a lot of good things got hammered out last week."

Carl Vogel, AT&T Broadband's chief operating
officer for field operations, said Excite@Home's problems were partly related to
frequent traffic bottlenecks between its own cable headends and Excite@Home's
national backbone -- a circuit that is Excite@Home's responsibility.

"But if you look at what's happened in past year
with AT&T and @Home, I think the exponential growth has outstripped best
expectations," he added.

To address the problems, Vogel said, AT&T Broadband is
creating its own circuits more frequently, using AT&T Corp. lines to the backbone
instead of waiting for Excite@Home. At the same time, he acknowledged that Excite@Home had
been deploying capital to upgrade its network and address the MSO complaints.

Excite@Home senior vice president and general manager Dean
Gilbert said last Friday that he thought @Home was generally doing fine.

"These are isolated issues. There's no systemic
problem at all. We're going to be challenged probably for the next five to 10 years
to be constantly upgrading the network," Gilbert added.

Vogel said he was confident from what he heard at last
week's meeting that the steps being taken were addressing the service issues, and not
only for his own network.

"This is not only an AT&T issue," he said.
"It's clear how Cablevision feels about it, too."

Other problems also are being addressed, such as
cable-modem performance issues, although Vogel would not pin down any one vendor as a
problem.

He said installation times are improving weekly, and they
currently run at about 1.5 hours to two hours per install. AT&T@Home had 144,000
customers at the end of September, and it expects to deliver 700,000 to 1 million by the
end of next year, Vogel added, with a major retail presence and faster installs being key
factors.

The company will also launch various service tiers next
year, where customers paying a higher monthly rate would get greater bandwidth, Vogel
said.

The major competitive factor facing AT&T's
cable-modem service, of course, is DSL. Vogel said the company's retail strategy
included aggressive rebates to bring down the retail price of equipment and installation
and grab market share before the telcos seriously accelerate DSL availability.

"We're seeing a lot of noise, but it's hard
to tell how much of that is actual availability," Vogel said of current DSL
marketing.

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