Excite@Home shuts down AT&T customers

AT&T Broadband scrambled to restore cable Internet service to its subscribers this weekend after Excite@Home cut stopped service on 850,000 lines. The two are in negotiations over owed payments, and last Friday @Home’s bankruptcy court permitted it to use a network outage as a bargaining chip.

AT&T has been building its own redundant cable broadband network and was able to switch 333,000 customers in North Texas, Washington and Oregon to the backup system. AT&T said it would have an additional 327,000 accounts in Illinois and San Francisco restored by Tuesday. The company said it would reactivate the remainder of its customer lines by Friday.

“We’re having good success in implementing our contingency migration plan,” said AT&T Broadband senior vice president Susan Marshall in a statement. “We deeply regret the temporary inconvenience to our broadband Internet customers resulting from the Excite@Home service shutdown, but we’re in high gear and driving hard to complete the customer migration to the new network.”

Excite@Home last week reported negotiations over AT&T Broadband’s service contract had broken down, leading them to cut off network service to its largest customer. @Home continues to negotiate with its other two largest cable partners Cox Communications and Comcast. Neither @Home nor the cable companies provided details about the terms being negotiated. All three major service providers have said they plan to deploy their own networks, weaning themselves from the bankrupt @Home.

AT&T has bid $307 million for @Home’s network, a price which raised protest from AT&T bondholders, who hold the majority of @Home’s more than $1 billion in debt. Last week, bondholders pressed the company to use its leverage over their Internet customers to make AT&T increase its bid. AT&T has balked at the creditors’ pressure, choosing instead to retreat from its involvement in @Home and concentrate on building out its redundant network.