Bankrupt broadband provider Excite@Home is refusing to take on any new high-speed internet customers, leaving its clients scrambling to find alternative ways of providing the service.
When filing for bankruptcy protection recently [WAMN: 01-Oct-01], Excite vowed to provide its services uninterrupted to existing customers, saying it had enough cash to last to the end of the year. It said the decision to block cable companies dependent on its network from adding new customers was made to preserve cash, thus ensuring its services could continue as promised.
AT&T, which holds a majority stake in Excite and is negotiating the purchase of its network assets, was informed of the decision on Tuesday, while Comcast Corporation and Cox Communications received the news on Wednesday.
The trio need to find new providers if they are to meet subscriber growth targets. AT&T said it could start adding new broadband customers on November 5 (though no details of how were forthcoming), while the other two – which have recently appeared keen to move away from Excite – have not yet unveiled any alternative arrangements.
However, one observer claimed there was an ulterior motive behind Excite’s decision: to force up the price AT&T will pay for its network business. AT&T values the assets at $307 million, while Excite wants it to pay over $1 billion.
News source: Financial Times