Excite@Home Cuts The Cord

The company says decision to stop newcomers from signing up was based on its bankruptcy filing and to preserve its cash. Move should not affect the existing 3.6 million subscribers.

by Michael Singer of siliconvalley.internet.com [October 12, 2001]

Excite@Home (NASDAQ:ATHM), which filed for Chapter 11 Bankruptcy a little more than a week ago won't be adding any new subscribers to its high-speed Internet service.

The Redwood City, Calif.-based company shut off the broadband tap as of noon Pacific Wednesday after it notified its cable partners including Cox Communications (NYSE:COX), Comcast (NYSE:CMCSK) and AT&T (NYSE:T).

The company says decision to stop newcomers from signing up was based on its bankruptcy filing and should not affect the existing 3.6 million subscribers that Excite@Home has in its broadband customer base.

"To preserve our cash and ensure continuation of our existing services we are not taking on any additional subscribers," an Excite@Home representative said in a prepared statement. "Additional subscribers entails incremental capital which directly affects our cash flow during this U.S. Bankruptcy phase."

The loss of Excite@Home would seem to be a boon to its competitors, but it doesn't seem to be the case.

As a matter of fact AT&T, which is buying Excite@Home's broadband Internet business for $307 million, seems to be dragging its heels.

AT&T Broadband spokeswoman Sarah Eder said that customers that call to sign up tomorrow would be put on a waiting list. AT&T Broadband will provision those customers "sometime in November."

And for those who have been provisioned but not yet installed?

"Installation will go ahead as planned," says Eder. "AT&T Broadband will do the installation, as always."

Cox, which signs about 8,500 new high-speed customers a week reportedly will take on new customers but can't guarantee a hookup for at least a couple of weeks.

Comcast, which analysts predict will end up with Excite@Home's customer's anyway, is also taking on new subscribers but reported similar delays.

But if the broadband providers take too long, potential customers could be lured away to either DSL services like at SBC Communications (NASDAQ:SBC) or digital satelite providers like DIRECTV Broadband.

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