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Troubled Internet service provider Excite@Home has stopped accepting new customers for its cable modem service.

The ISP, which says it serves about 3.2 million broadband customers, filed in a San Francisco Court in September for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. At the same time, AT&T said it would acquire the company's broadband Internet access business and service assets for about $307 million.

The company and its creditor committee decided to stop taking orders to preserve cash and ensure the continuation of existing core operations, spokesperson Londonne Corder says. The company stopped accepting customers on Wednesday, but none of the company's current subscribers will be affected, she says.

"While we are in this reorganization stage, Excite@Home is committed to providing service to its existing @Home subscribers," Corder said.

Many Partners

A total of 21 broadband service providers use Excite@Home equipment and network management services, including national companies such as AT&T Broadband, Comcast, and Cox Communications. In August, an AT&T Broadband spokesperson said that of the company's 1.35 million customers who access the Internet via cable modem, the majority rely on services from Excite@Home.

"AT&T Broadband is committed to providing uninterrupted service to our customers," she added. AT&T already held a 23 percent stake in Excite@Home.

Shifting Focus

Corder was not sure when Excite@Home's customers were made aware of the plan to stop offering access to new customers, but said "due diligence was served."

In September Excite@Home discontinued many of its online offerings. It announced it was ending some partnerships with shopping sites, and closed its MatchLogic subsidiary. The company also reduced its staffing 25 percent--by about 500 employees--at that time.

MatchLogic provided interactive marketing services for Excite@Home and was one of the parts of the company hardest hit by the slowdown in advertising spending, according to an Excite representative.

During its initial cost cutting, company representatives said the measures were intended partly to accomplish its restructuring. Excite@Home was putting less emphasis on online media and low-bandwidth Internet access.

Tom Mainelli of PCWorld.com contributed to this report.

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