Excite service poised for shutdown
Bankruptcy ruling may mean yet another setback for broadband
12/01/2001
By VIKAS BAJAJ / The Dallas Morning News
A federal bankruptcy judge in California gave At Home Corp. the right Friday to shut down its high-speed Internet service, which serves 4 million consumers.
As early as 2 a.m. Saturday Dallas time, millions of customers were set to lose their Internet access, e-mail addresses and personal Web pages, but negotiations between At Home and its cable company partners continued into the night. In Dallas-Fort Worth, 22,000 cable modem customers get At Home service via Charter Communications Inc., and an undisclosed number receive it from AT&T.
At Home creditors are seeking higher rates for its Excite@Home service from some of the nation's biggest cable companies.
Charter, AT&T and other cable companies appealed the decision and were in talks with At Home creditors to keep the network alive. AT&T has previously offered $307 million to buy At Home, but the struggling firm's lenders say that's not enough.
The service's failure is one in a series of shutdowns and bankruptcies to afflict high-speed Internet, or broadband, services.
The bankruptcy of NorthPoint Communications Inc. early this year left hundreds of thousands of businesses with no Internet service, and this fall AT&T Wireless Services shut down a wireless high-speed service leaving thousands with no high-speed options.
"There are a lot of people who were disconnected from wireless Internet services, or who didn't like DSL and went to cable modems," said David Goldstein, president of Channel Marketing Corp. in Addison.
"Now their providers are shutting down," Mr. Goldstein said. "Where else do they go? They have no other alternative for high-speed Internet access."
Federal Communications Commission Chairman Michael Powell urged U.S. Bankruptcy Judge Thomas E. Carlson to implement a transition period for At Home users, saying the disruption could be a serious setback to broadband deployment nationwide.
Judge Carlson said his decision wouldn't be influenced by the plight of subscribers.
"Bankruptcy typically causes much disruption all the time, leading to loss of jobs and services to communities."
St. Louis-based Charter said it has been sending customers software that lets them shift to the company's own Internet provider, Charter Pipeline. Customers who haven't received the software or need help with it can call 866-413-9096 or 888-843-0707 toll free.
The company has been informing subscribers about Pipeline for weeks now, but it's barred from telling them outright to drop Excite, because that would violate Charter's contract with At Home, said Andy Morgan, a company spokesman.
"We are in a touchy situation where we can't be as aggressive as we might otherwise be," Mr. Morgan said.
AT&T officials said it was building its own network in case it can't buy the company. A hearing before Judge Carlson on AT&T's purchase is scheduled for Wednesday.
If the purchase isn't approved, some customers could lose their service temporarily, spokeswoman Sarah Eder said. More than half of AT&T's 1.4 million cable modem subscribers rely on At Home. The rest are served directly by AT&T.
To re-create At Home's network, AT&T and other cable companies must install routers, switches, fiber-optic lines and other equipment to connect their customers to the Internet.
Despite being a highly popular, fast-growing service, At Home struggled to make enough money, analysts said. The Internet company said it was losing an average of $6 million a week.
"At a very superficial level, we have to figure out how to build a company and make money on a data service," telecommunications analyst Jeffrey Kagan said.
Technology editor Alan Goldstein and The Associated Press contributed to this report.
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