@Home gets network home of its own

Cable Internet provider @Home has agreed to a 20-year lease on a 15,000 mile network of high-speed fiber from AT&T to enhance its data transmission offerings and provide for future growth.

In a deal reportedly worth $100 million, AT&T will begin by supplying @Home with two OC-48 (2.4 Gb/s) channels providing capacity of 5 Gb/s over a wavelength division multiplexing (WDM) network. According to Milo Medin, @Home's chief technology officer, the company has enjoyed relatively favorable costs at cable headends and in its regional networks because of good relationships with local operators. But it has had to buy facilities from Sprint to interconnect those regional networks and pay a per-unit fee for data transmission.

"It became clear to us a year ago that we could not pursue that track into the future," Medin said. "The AT&T deal will essentially make @Home a facilities-based service provider. That separates the top tier from the next tier in the [Internet protocol] space."

The new network will place routers directly on the AT&T optical network's WDM layer. The agreement also includes co-location in AT&T facilities and provides for future capacity upgrades, which will bring new business opportunities, particularly in the ability to sell virtual private networks to Fortune 500 companies. To date, the company's @Work commercial division has confined its efforts to small and medium-sized businesses with localized needs.

Medin insists @Home began its search for a wholesaler before AT&T announced plans to merge with Tele-Communications Inc., @Home's largest stakeholder, but many analysts believe the service provider will get favorable treatment from the merger. "Obviously, there are going to be some cost advantages to being 40% owned by AT&T," said Patty Riali, an analyst with DataQuest.

GST Telecommunications will become the first carrier to optically integrate its long-haul and local networks using Ciena's MultiWave Sentry and MultiWave Firefly DWDM systems.

ICG Communications signed a deal with MindSpring Enterprises to sell the U.S. operational assets of its Netcom subsidiary for $215 million in cash and $30 million in stock. Under the deal, ICG will retain Netcom's backbone and 236 points of presence while MindSpring will use the network.

e.spire Communications will launch digital subscriber line service in several large markets, including New York and Atlanta.