Excite@Home service could end Friday

If Excite@Home creditors have their way, the high-speed cable Internet service will shut down Friday to keep the network from burning any more cash while debt holders negotiate with AT&T and other cable operators for better financial terms in a reorganization or buyout.

Excite@Home briefly stopped hooking up new customers after it filed for protection under Chapter 11 of the U.S. Bankruptcy Code in September. It reached agreements with its largest cable partners - Cox Communications, Comcast, and Rogers Cable - to begin Internet service deployment, but those agreements expire Friday.

Creditors of the bankrupt service provider seek to shutter the company to conserve capital while looking to better a $307 million buyout offer from AT&T. Most of AT&T Broadband's approximately 1.35 million customers get Internet service through Excite@Home, an AT&T spokeswoman said. Excite@Home's management opposes efforts to shut the network down, as does AT&T, she said.

The Excite@Home bankruptcy carries shades of the NorthPoint Communications Group DSL shutdown in March of this year. NorthPoint's demise abruptly cut off tens of thousands of customers - mostly small businesses - from their high-speed Internet connections. California regulators moved to block the shutdown, demanding a 30-day warning period and exhorting service providers to make alternative arrangements in haste.

The impact of an Excite@Home shutdown is an order of magnitude greater than NorthPoint's. Excite@Home reported 4.2 million residential broadband customers nationwide in its third quarter earnings report this month.

AT&T will keep Excite@Home alive if its bid is accepted and approved in another hearing next week in federal bankruptcy court in San Francisco. AT&T already holds about 38% ownership in Excite@Home, with voting interest of 79%.

The IDG News Service is a Network World affiliate.