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AT&T Works to Restore Internet Access

Associated Press
Published | Updated

SAN FRANCISCO – About 15 percent of customers of ExciteAtHome's high-speed Internet service remained without access Monday after the bankrupt company cut off service to AT&T Broadband subscribers.

However, ExciteAtHome reportedly had reached a tentative deal with a dozen other cable operators to keep their service running.

AT&T had restored service Monday to more than a third of its customers -- about 330,000 of its 850,000 subscribers -- by moving them to its own network. The company said it could take as long as 10 days to restore service to its other subscribers across the United States.

"I miss my Internet," said Deanna Bruggemann, an AT&T Broadband customer who lives in Livermore, about 45 miles southeast of San Francisco. She said she appreciated a call from AT&T advising her what was happening, but added, "They better figure out something."

Service to the other companies that sold Internet access through ExciteAtHome's network was not cut off. ExciteAtHome has more than 4 million subscribers.

Bankruptcy Judge Thomas Carlson gave Redwood City-based ExciteAtHome permission to cancel its contracts with cable companies after concluding they had become burdensome to the company. ExciteAtHome executives said the contracts were costing the company up to $6 million per week.

The Washington Post reported Monday that the company had reached a tentative deal with 12 cable companies to keep Internet service running for their subscribers. AT&T was not part of the deal, which was likely to be formalized Monday, the Post reported.

The other companies agreed to pay more than $300 million to keep the service going for the next three months, the Post said, citing a source close to the negotiations.

In a statement on its Web site, ExciteAtHome said it ended service to AT&T "after determining that it would not be able to reach agreement."

ExciteAtHome wants the cable companies to pay higher fees to connect to its network. Until ExciteAtHome filed for bankruptcy protection, the cable companies had been paying a monthly fee of $12 per subscriber.

ExciteAtHome's bondholders have accused AT&T of using its controlling position on ExciteAtHome's board to steer the company into bankruptcy as part of a scheme to buy the company. AT&T denies the allegation.