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The bump in the road for Broadband.

  11/28/2001 - Wednesday, November 28, 2001 6:02:52 AM MST Albuquerque, Nm
  By Dustin D. Brand; Owner AMO

The truth hurts sometimes, and for broadband internet access; it's hurt bad.
  Cable, DSL, Wireless, T1 - OC12, and Dial-Up - the Broadband internet options.

  The major problem with DSL services was the slow adoption by the Phone Companies and major internet providers (AOL, MSN, Earthlink). In what appeared to be a wait until they die attitude, the Major internet providers sat by and watched as the top independent DSL Service providers filed for Chapter 11 Bankruptcy, and then subsequently closed business indefinitely. DSL Service has also been plagued by lengthy activation times, poor service, and pricey monthly basic service.

  I covered the DSL fallout, and documented the squabbling by customers and companies while customers left due to lack of service, and companies went out of business likely for the same. In came Cable internet access.

  @Home pioneered this service here in the United States. Growing quickly for high speed cable internet access, @Home bought the Excite Web portal for $6.7 billion in January 1999. Since January of 1999, it's been somewhat downhill, and recently straight downhill.

  Excite@Home filed for Bankruptcy protection on October 1st, 2001. Excite@Home is now under court proceedings with negotiations involving their cable company partners. If the negotiations do not fare well, the Judge could order the Excite@Home service terminated which would result in an infusion of 4.1 million of it's customers back into the market of internet access, and a large amount of headache.

  AT&T is part of the Excite@Home Bankruptcy proceedings since they agreed to buy Excite@Home and their assets for $307 Million. @Home paid $7.2 Billion alone to acquire Excite in 1999. The catch here is that Comcast, a Excite@Home partner, signed a confidentiality agreement Friday Oct. 2 with AT&T to purchase AT&T Broadband for $37.8 Billion (smaller than their initial offer), which should include Excite@Home. AT&T also signed a confidentiality agreement with AOL Time Warner back in mid November for the purchase of AT&T Broadband. Comcasts' initial public offer for AT&T Broadband was $44.5 Billion and was rejected.

  Ah, the irony is abound. AOL could own Excite@Home, Comcast could, or the Judge in the Excite@Home proceedings could leave 4.1 Million Excite@Home users without service. Comcast and Cox, 2 of the largest cable companies in America already terminated their agreement with Excite@Home to provide their broadband internet access effective June 4, 2002.

  Meanwhile, Excite@Home bondholders object to the AT&T Purchase of Excite@Home assets for $307 Million because they alone are collectively owed $750 Million. Let's not forget @Home purchased Excite for $7.2 Billion in 1999. The internet stock bubble burst a long time ago, just as Bob Metcalfe predicted from the ether. The evidence of the internet bubble bursting is no more evident than in the evaluation of Excite@Home in these Bankruptcy proceedings.

  The bump in the road for internet broadband is a must. This is the key to ultimate learning, the curve required in experience in business and society; that we can learn from our mistakes. The mistakes of collapsed business models, falling stock prices, bankruptcy proceedings were all predicited, not only by myself - but also Bob Metcalfe - the inventor of the Network Card and now retired from the ether columnist.

  DSL at the same speed as a T1 costs half what a business class T1 costs. Cable internet access can eventually expand to well over 10Mbps forward and back, at a super tiny fraction of the cost comparable business class internet access costs. Even with this required bump to global adoption of consumer broadband internet access, 5 year old projections of broadband internet use worldwide have exceeded expectations. Excite@Home alone has 4.1 Million users, clearly the largest broadband internet userbase in the world, and also America.

  Who will be left after the bump has been passed over? Not everyone, but the biggest will struggle to survive, and in one form or another worldwide broadband internet access will easily double within a 18 months I predict. The use of fiber optics, the adoption of broadband by the major players such as Microsoft Network, AOL Time Warner, Earthlink, AT&T spell eventual worldwide adoption nearing Dial-Up within 5-7 years. In the mean time, I don't expect even a dip in the use of Internet broadband. Despite the bump in the road, broadband internet is what the internet is all about, and it's what it's built on.

  Related AMO Articles:
   Excite@Home gets a payment notice.
   Can Excite@Home survive?

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