AT&T Moves Customers Off Excite@Home

AT&T's Broadband division announced Friday it has finished transferring 850,000 of its Internet service customers to its own network, six days after Internet service provider Excite@Home cut off their high-speed connections.

Less than 10,000 customers in areas of low population density around the country, including Aspen, Colorado, remain disconnected while AT&T waits for equipment to install, said Sarah Eder, an AT&T spokesperson. AT&T expects the remaining customers to be reconnected within a week.

AT&T capped downstream speeds at 1.5 megabits per second, a slower speed than Excite@Home's 3-mbps rates, she said.

The transition has been rapid relative to AT&T's early expectations. It first estimated a two-week time frame for the switch over, revising its figures mid-week. Some broadband Internet customers have had trouble activating their new connection, however, according to Eder. She couldn't give an estimate about how many customers are having problems activating their connection. The hold time for customer service has become an hours-long wait for some, Eder said. AT&T has added customer service agents to handle the temporary increased demands, she said.

The creditors of bankrupt Excite@Home received permission from a U.S. federal bankruptcy judge to shut down its network--a maneuver meant to put negotiating pressure on Excite@Home's cable partners and potential buyers. Though Excite@Home's threat produced a $355 million temporary funding deal from Cox Communications Inc., Comcast Cable Communications and other cable partners, the actual shutdown in service prompted AT&T to withdraw its $307 million buy-out offer, and take its subscribers to its own network.

Cable Shuffle

Excite@Home did not intentionally disconnect any customers from the other cable companies, although some were temporarily cut off for a few hours as a result of an administrative error by Excite@Home.

Excite@Home will cease operations in 90 days, the company announced Tuesday.

AT&T owned a majority of the voting shares of Excite@Home before the bankruptcy, and would have wanted a complete buyout only to guarantee service, said Eileen Connolly, an AT&T spokesperson.

But AT&T had begun building out its own infrastructure months ago, as Excite@Home's deteriorating financial situation became clearer.

AT&T Broadband itself is up for sale. Comcast, Time Warner Cable and other companies are vying to buy AT&T Broadband, the cable company with the largest subscriber base in America. AT&T's swift shift from Excite@Home to its own network reflects a need to appear competent and agile in front of potential buyers, an analyst said.

"AT&T Broadband wanted to look as good as possible for potential buyers," said David Cooperstein, research director for the Forrester Research telecommunication market analysis team in Cambridge, Massachusetts.