Excite@Home's Last Mile
by David Sims
The 3.4-million subscribers who rely on Excite@Home's high-speed cable service for their fast connections must be wondering how long the pipes will continue to flow, now that At Home has filed for Chapter 11 bankruptcy. The one-time super-portal, turned cable-modem service provider, said that with protection from its creditors, it had enough cash to keep service up during reconstruction. After that, all bets are off.
But if any subscribers are surprised by the announcement, no one in the press or the tech industry seemed to be. News.com's Ben Heskett and Rachel Konrad said the move was "as expected," and most news reports noted that AT&T was standing by, waiting to bid $307 million for Excite@Home's assets. The ailing tech company (Excite@Home, not AT&T, which ain't doing so great either), had picked up $100 million in "emergency financing" just last June. But with a burn rate around $350 million per quarter, that didn't last long, and by July some investors said they wanted their money back.
AT&T, which already owns 23% of Excite@Home and a controlling vote on the board, is on a mission to divest itelf into four separate companies (it spun off AT&T Wireless, the first of these, earlier this summer), and its broadband unit could be the crown jewel. Some
posters on Slashdot cited recent speculation that AT&T would sell the fat pipes to AOL, and wondered if this would "sweeten the deal" or put an end to it.
After Comcast made an unwelcome bid for AT&T's cable unit back in July, AT&T scrambled to find other buyers. Then in early September, reports emerged that AOL Time Warner was considering a bid, and the
Wall Street Journal suggested AT&T would rather sell its cable system to Cox Communications -- not only because regulators might like the deal better, but because Cox was also interested in voice-over-cable, a pet project of AT&T chairman C. Michael Armstrong. Indeed, that kind of deal could even garner support from Disney or Microsoft, since either company would be eager to keep the system out of rival AOL's pocket. CNNfn.com reported on Friday that AT&T had signed a confidentiality agreement with Comcast, suggesting the two were ready to talk.
Meanwhile, Excite@Home's chief executive, Patti Hart, who was brought on in April, said Chapter 11 would enable them to continue service during restructuring, but that could be tougher for the employees on board since the company laid off 500 last week. Any subscribers who moved over to the cable modem service after their DSL providers folded must now be wondering if high-bandwidth from the curb is feasible at all. Could it be we're doomed to return to 56K dial-up? Or can 802.11 wireless save us all?
Excite At Home Files for Chapter 11, To Sell Broadband Network to AT&T
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Internet Firm At Home To File for Bankruptcy
At Home Says It Will Seek Chapter 11 Protection
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Excite@Home files for bankruptcy
Chapter 11 For Excite@Home
Excite to file for Ch. 11