- The Washington Times - Saturday, December 1, 2001

A ruling by a U.S. Bankruptcy Judge yesterday will allow the financially troubled AtHome Corp. to shut down, leaving as many as 4 million high-speed Internet customers including thousands in the District and suburban Maryland without access, barring a last-minute agreement between AtHome and the cable companies it serves.
Broadband users living in Fairfax County will be unaffected.
Judge Thomas Carlson ruled in San Francisco that AtHome, the provider of ExciteAtHome broadband service, can break its current contracts with the cable companies linking its service to subscribers. He said the cable companies should pay more for the service. AtHome, which filed for Chapter 11 bankruptcy protection in October, reportedly was losing $6 million a week under the current contracts.
The cable companies said they would appeal Judge Carlson's decision as soon as possible and were expected to work with AtHome until midnight last night to hash out a deal that would prevent service from being disrupted.
"We are continuing to talk with ExciteAtHome and are hopeful that there will be no interruption in service for our high-speed Internet customers as we work to reach a resolution," Comcast Senior Vice President David Juliano said in a press release.
In its own release, AT&T; appeared less optimistic about reaching an agreement.
"AT&T; is prepared to take appropriate steps to protect service to its customers, including if necessary moving its customers to a new high-speed network immediately," the release said. AT&T; acknowledged it could take "one to 14 days, if necessary" to move a customer to the new network. It also said it would provide disrupted customers with two days of free service for each day of interruption.
If service is stopped, Comcast customers in suburban Maryland and the District will be affected, because the company uses AtHome as its broadband provider in those areas. Specific subscribership figures for the region were not immediately available.
In Fairfax County, customers will be untouched by the ruling. Cox Communications' Fairfax division, which services 35,000 high-speed customers, uses Roadrunner, not AtHome, as its provider, Cox spokesman Scott Broyles said.
Even if the cable companies and AtHome reach an agreement soon, analysts said disruptions in service would last at least several days if the agreement wasn't made before midnight last night.
"You're looking at a three- to four-day minimum service disruption," said Jordan Rohan, an analyst with the Soundview Technology Group in Greenwich, Conn. "At the very minimum, it's a customer service nightmare."
Some cable companies have offered dial-up alternatives to those who might be affected by the shutdown. In addition, both Cox, Comcast and AT&T; say they are working to build their own networks independent of AtHome. Details on when those networks would be completed were not disclosed.
AT&T; said it will be able to provide access faster than it would take to set up a Digital Subscriber Line (DSL), which provides high-speed Internet access through phone lines and usually takes a minimum of two weeks to set up. Analysts say it's unlikely companies will be ready in time to address an AtHome shutdown.
Consumer advocates were critical of the cable companies' efforts to provide backup services. "It's stunning that most of the them didn't have a better backup plan," said David Butler, spokesman for the Consumers Union. "The planning part of this decision was pathetic, and customers are paying the price."
The potential shutdowns could have been averted if Judge Carlson had approved the sale of AtHome's broadband assets to AT&T; for $307 million. But all along, AtHome had argued the figure was too low, and many analysts agreed.
Meanwhile, analysts were left wondering what the case's long-term effects on the cable industry might be. Some equated AtHome's shutdown to similar problems associated with DSL, including the bankruptcy of major providers such as Northpoint Communications. Cable has more than five times as many broadband customers as DSL, but DSL has been gaining some ground in the residential market. The big question, analysts said, is whether the AtHome shutdown will decrease confidence in the cable broadband market.
"I definitely think that if customers become unsure of cable modem providers, it's definitely going to be a big boost for DSL," said Pat Hurley, a DSL analyst with Telechoice, a telecommunications consulting firm. But Mr. Hurley said that if cable companies can build their own networks quickly or find stable, well-known business partners to replace AtHome, cable broadband will continue to thrive.

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