|
[Date Prev] [Date Next] [Thread Prev] [Thread Next] [Date Index] [Thread Index]
Looks like Comcast got off lucky; the AT&T Cable customers who also use
@Home got cut off over the weekend. At least 2 week outage, they're saying.
http://news.cnet.com/news/0-1004-200-8039534.html
At least one cable partner of Excite@Home has terminated high-speed Internet
access to its customers in wake of a Friday court ruling that threatened to
shut down the service, and others may be preparing to do the same thing.
AT&T and Excite@Home confirmed Saturday afternoon that most of the 850,000
AT&T cable modem subscribers around the country were without high-speed
Internet access.
AT&T said it had transfered about 10 percent of its Excite@Home
customers--all of them in Oregon and southwest Washington state--to an
independent AT&T service, but it didn't have immediate alternatives for the
remaining 90 percent.
"AT&T continued negotiations with At Home Corporation late into Friday
evening and early Saturday morning only to see the Excite@Home service cut
off," AT&T Broadband said in a statement. In a separate statement,
Excite@Home said it was continuing to negotiate with all its remaining cable
partners, including Cox Communications and Comcast.
The announcement came as no surprise to AT&T Broadband customers, most of
whom woke up Saturday morning to find that they couldn't send e-mail or surf
the Web from their high-speed connections. Many had to rely on slower
dial-up connections to access information on AT&T's Web site, but it
contained no service updates.
AT&T representatives staffing a toll-free hotline--which was bombarded with
callers and often busy or unavailable--told customers who could get through
that service was disconnected at 2:15 a.m. PT. Call center agents also told
subscribers that their service would not be restored for "a few weeks,"
possibly until AT&T can provide Internet access without the help of
Excite@Home's infrastructure.
According to AT&T, customers in Chicago, Dallas, Denver, Connecticut,
Pittsburgh, Sacramento, Salt Lake City, Seattle and the San Francisco Bay
Area will be transferred to its new network in the next two to 10 days. Some
customers in Michigan and the Rocky Mountain region will also be switched to
the new network. AT&T warned that customers "may experience temporary
service disruption during the migration."
Numerous people told CNET News.com that AT&T representatives were calling
them at home on Saturday morning and afternoon to alert them to the outage.
AT&T is offering customers two days of credit for each day they are without
high-speed Internet access.
But the courtesy may not compensate for the outrage that many customers feel
toward both Excite@Home and AT&T. AT&T is offering customers free dial-up
service from AT&T Broadband if their service goes down--but the conventional
connection is painfully slow for people who have grown accustomed to
high-speed cable modems, especially for downloading.
Customers must also change e-mail addresses because of the switch. According
to AT&T, e-mail domain names will automatically change from
(username)@home.com or similar addresses to (username)@attbi.com.
The changes--and lack of advance notice--offended many customers.
"I managed to reach AT&T Broadband support this morning after about 40 tries
and they confirmed Excite@Home service was disconnected," said Mark J.
Welch, an AT&T subscriber in Pleasanton, Calif. "Oddly enough, the people at
that same number had assured me on Friday afternoon at 3 p.m. that any
rumors about service were false, and there was no possibility of an outage,
and my e-mail address would continue to work."
AT&T is one of many cable companies that partnered with Excite@Home to
provide 4.1 million customers high-speed Internet access.
Customers who rely on Excite@Home and other cable companies, such as Comcast
and Cox Communications, also reported outages on Saturday, but those
customers did not receive phone calls or e-mail from their providers that
service was out or would be resumed eventually.
Meanwhile, other cable partners were preparing customers of the potential
for disrupted service in case Excite@Home ended all negotiations and
cancelled service to all cable partners. St. Louis-based Charter
Communications announced Saturday afternoon that it was switching all
450,000 Charter@Home customers to Charter's independent high-speed Internet
service, Charter Pipeline.
Dave Barford, executive vice president and chief operating officer for
Charter, said technicians have been preparing for such a move for months but
only began switching customers immediately after Friday's court ruling.
Charter has already switched 90 percent of its customer to its own pipeline.
Those who still have Excite@Home service may experience temporary outages
and slowdowns but will soon be switched, Barford said.
"Crews worked through the night to make the transition with minimal
disruption to customers," Barford said. "We are still working on some minor
issues, but the process went even better than we had hoped."
Fallout from court
Termination of service for AT&T customers began early Saturday morning, less
than 24 hours after a key court decision that threatened to terminate
service for Excite@Home customers.
On Friday, a San Francisco bankruptcy court judge ruled that angry
bondholders and cable partners of Excite@Home must go back to the bargaining
table. In the weeks leading up to the decision, the cable companies
threatened to cut off service if their contracts, which expired at midnight
Friday, were terminated.
The cable companies are upset about having to renegotiate contracts in large
part because they fear that the new contracts will siphon revenue from them
toward Excite@Home, which filed for bankruptcy protection in October. By
some estimates, Excite@Home is burning through $6 million per week because
of outdated contracts with the cable companies.
Although the contracts are complicated documents and vary widely depending
on the cable partner, the agreements are weighted in the cable companies'
favor. With the average cost of Excite@Home service around $46, the cable
companies collect roughly 65 percent of that, while Excite@Home collects
only 35 percent.
Interim contracts that parties negotiated in October are slightly different
than the official contracts that are now being renegotiated, but the interim
agreements still funnel a disproportionate amount of money toward cable
companies. Contracts are also slightly different in Canada, where cable
companies take as much as 80 percent of the revenue, leaving only 20 percent
for Excite@Home.
Because Excite@Home filed for Chapter 11 bankruptcy protection in October,
U.S. Bankruptcy Court Judge Thomas Carlson said Friday that Excite@Home may
legally break its existing contracts to increase its chances of survival. He
rejected the cable companies' argument that the contracts should be
maintained to preserve the Internet service of 4.1 million customers, who
represent 45 percent of the cable modem users in North America.
Some sources have said that the cable companies are negotiating to extend
their existing contracts at least through next week, when AT&T, which has a
79 percent voting interest in Excite@Home, is expected to make a $307
million bid for Excite@Home's cable assets. If and when the sale is
finalized, AT&T could renegotiate contracts with the other cable providers.
Many Excite@Home shareholders and creditors say the company's cable assets
are worth vastly more than $307 million--some insisting that fair market
value is as high as $1 billion. AT&T may be terminating its service in order
to make customers defect--a move that would devalue Excite@Home and make
AT&T's $307 million bid seem more appealing, critics say.
AT&T Broadband representatives said this week they could assume about 20
percent of Excite@Home customers if the company shuts off service.
Excite@Home has been in meetings for the past several weeks with AT&T as
well as other cable companies.
The last chapter in a long history
AT&T's $307 million bid--as well as the termination of its service to
customers--is the latest chapter in the tortured relationship between AT&T
and Excite@Home.
Redwood City, Calif.-based Excite@Home became the largest Internet company
when it was formed in a $6.7 billion merger of Web portal Excite and cable
company @Home in January 1999. It remains one of the most high-profile and
strained marriages of the Old and New Economies, with AT&T owning the
majority of Excite@Home's outstanding stock. Both companies share several
board members--and executives at both companies have been vocal in their
disdain for those at the other company.
Basking Ridge, N.J.-based AT&T, which inherited its @Home stake and board
representation from its acquisition of cable TV leader Tele-Communications
Inc., opposed the very creation of Excite@Home.
AT&T had been a shareholder in the cable company for only a few months
before its directors voted to acquire Excite--a second-tier Internet portal
whose dot-com culture contrasted starkly with Ma Bell's conservative
sensabilities.
Frustration with former Excite@Home CEO Tim Jermoluk became clear at a
meeting in March 1999 in the boardroom of AT&T's headquarters in New York,
when several directors suggested spinning off Excite as a separate
company--essentially undoing the merger only two months after the deal had
closed. Clashes between Jermoluk and then-AT&T cable chief Leo Hindery, who
adamantly opposed the merger, are legendary among executives at both
companies.
AT&T wasn't the only problem Excite@Home had to face. Since its inception,
it has operated under an awkward ownership and governance structure that
included significant input from three major cable operators: AT&T, Cox and
Comcast. As a result of the complicated ownership structure, Excite@Home has
appeared unfocused and divided. More bickering between AT&T Chief Executive
C. Michael Armstrong and Hindery over the direction Excite@Home should
take--and the role content should play--left the access provider adrift
among the big cable operators' vast assets.
Boardroom divisiveness escalated in March 2000, when Ma Bell assumed
majority control of Excite@Home's board of directors and offered to buy the
stakes of co-partners Comcast and Cox. At that point, AT&T had a 23 percent
ownership stake in Excite@Home and a 74 percent voting stake.
In January, AT&T traded $2.9 billion in its stock for the ownership stakes
that competing cable operators Cox and Comcast held. That deal boosted
AT&T's stake to 38 percent. AT&T also took a 79 percent voting interest in
the broadband Net access company.
Some insiders say AT&T's heavy stake in the company compromised the board's
decision-making abilities and took the focus away from Excite@Home
shareholders.
Some Excite@Home insiders blame the company's plight squarely on cultural
clashes between AT&T's "cable guys" and Excite@Home's more informal, younger
executives. In fact, Excite@Home's October bankruptcy filing was part of a
deal with AT&T. The agreement called for Excite@Home to become wholly owned
by the long-distance giant by early 2002, pending approval by the bankruptcy
court.
At the time of the bankruptcy filing, AT&T said that it will use
Excite@Home's assets as the core of a larger broadband network. AT&T
insisted customers would not experience an interruption in service.
"AT&T remains committed to working with Excite@Home's management and the
bankruptcy court to provide uninterrupted high-speed cable Internet service
to existing Excite@Home customers, as well as continuing relationships with
other cable companies to ensure seamless service to their customers on the
@Home network," the company said in a statement on Oct. 1.
______________________________________________________________________
Philadelphia Linux Users Group - http://www.phillylinux.org
Announcements-http://lists.phillylinux.org/mail/listinfo/plug-announce
General Discussion - http://lists.phillylinux.org/mail/listinfo/plug
|
|