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Some Cable Customers Left In the Dark

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Posted November 20, 2001 By Jim Wagner     Feedback

Despite actions by many of the nation's top cable providers, some consumer's aren't getting word of the many changes affecting the industry -- word that affects who their provider is and if they will even have one down the road.

David Nash's case is the perfect example of the confusion created when cable companies start playing "give and take" with their Internet subscribers and not telling them about the giving or taking.

Last year Nash signed up for cable Internet services through @Home, the largest broadband Internet service provider (ISP) in the nation. Through an affiliate program, Nash got the high-speed service with AT&T Broadband, the local cable company, which got him up and running in due course.

In February, AT&T Broadband , looking to consolidate its cable network, signed a deal with Charter Communications to swap some of its customers.

Right about that time, Nash discovered errors in his billing. Calls for support to both carriers went unanswered. It wasn't until months later, Nash said, that he even found out the switch was made, and that was only after an AT&T Broadband representative told him offhand he was now an @Home subscriber through Charter.

"It's a good story of the complete failure of both companies, at least in my case, to tell me of support line changes and billing changes," Nash said. "To this day, I'm still not sure who my real provider is or where my email will go to in the future. My best guess is that I'm a Charter user."

Even his guess remains in doubt, given an e-mail he and AT&T Broadband users received in the mail Sunday by Susan Marshall, AT&T Broadband senior vice president of advanced broadband services.

In the e-mail, Marshall asked customers to pay attention to any news put out by AT&T Broadband in reference to @Home's imminent demise. The ISP, which filed for bankruptcy protection in September, is expected to shut down the network if creditors don't find a buyer soon to take over the operation.

"Please look to your email, U.S. mail and our customer care Web site for important information from AT&T Broadband about any potential changes to your service," Marshall wrote. "We have also created a special Web page where we will post announcements regarding any upcoming changes."

In it, Marshall outlined steps that should be taken to minimize the damage caused in the event of a shutdown. They include having the consumer check e-mail every day so that messages get onto the hard drive and backing up their personal Web pages.

The e-mail, which comes to Nash even though he is supposedly with Charter now, is indicative of the confusion the cable industry is inflicting, whether intentionally or not, on the consumer broadband community.

Although Nash's case revolves around Charter and AT&T's subscriber swap earlier this year, indications are the problems encountered with that small trade could be overshadowed by @Home's problems today. The ISP, with more than three million users nationwide, has affiliate agreements with 13 cable companies for high-speed service.

If @Home were to shut down operations tomorrow, all 3.7 million customers would be sitting without cable services. That would be bad news for the cable industry, which has overtaken digital subscriber line (DSL) in deployment throughout the country, the result of a costly campaign to upgrade analog networks.

It seems unlikely the cable industry would let @Home close its doors without providing for a contingency plan. However, that's exactly what the broadband community said before NorthPoint Communications creditors shut down its network in March, stranding thousands of DSL users.

DSL, a technology that's had plenty of quality of service issues to deal with, hasn't been the same since. Many of the Baby Bells, which had confidently projected stellar subscriber gains in years past, are now scaling back and even putting an effective halt to their DSL deployment.

An @Home shutdown would be a significantly bigger problem for the cable industry. The broadband sector, which has enjoyed a level of customer satisfaction the DSL industry can only hope to achieve in the coming years, would be devastated as customer confidence would evaporate.

So far, cable companies partnered with @Home have been relatively silent about their plans, a decision that's causing some concern among its customers.

AT&T Broadband, which owns the largest cable network in the U.S., has spent the past couple months wooing @Home shareholders in an effort to buy up the ISP.

The deal has been highly controversial, though. Ma Bell's high-speed access arm is one of the largest shareholders in the company (despite steps taken to minimize that view) and many suspect the company has deliberately set the stage for the provider's current problems and subsequent "rescue" effort at a reasonable rate.

According to Sarah Eder, AT&T Broadband won't discuss any of its contingency plans in the event of an @Home shutdown. She said they are awaiting word on Nov. 30 for approval to its latest buyout offer.

"We've done a pretty good job thus far of communicating to our customers and keeping them updated as to what the process looks like and what could happen in the event of an asset purchase agreement or contingency event," Eder said.

Officials at Comcast Corp. and Cox Communications were a little more forthcoming.

Both have similar plans in the works: at Cox, spokesperson Laura Oberhelman said they've e-mailed a "portion" of their 779,000 @Home subscribers to tell them of recent events and that a Cox-managed ISP is in the works; Comcast, on the other hand, has e-mailed all 792,700 of its customers, said Jenny Moyer, Comcast spokesperson, and continue to talk with @Home about connectivity options.

Both acknowledge a system is not ready to take on their customers tomorrow if something should happen, despite the fact both companies have know for months they would not provide @Home services for much longer.

In August, officials at the two cable providers announced they would not renew their affiliation contract with @Home, due for expiration in June, 2002. According to an @Home spokesperson, Stephanie Xavier, they've been in talks to discuss "alternative arrangements for the continued provision of its service" with the two cable companies.

In the end, it's the customers who might have to pay for a loss in coverage if a transition system isn't put in place. In addition to losing the ability to forward their e-mail accounts from @Home to their new provider and any personal Web space they might have, there's no guarantee they'll get the monthly rates available now or with the same cable modem.

Part of the blame rests with the FCC, which has been slow to adopt accountability measures in the cable industry. Regulators at the telecommunications cable division have only recently announced plans to have another look at cable company ownership limits, which currently sit at 30 percent. The only other FCC ruling of note on cable Internet rests with a ruling on the AOL/Time Warner merger in January, which opened up access to competitive providers.

DSL, which is strictly regulated by the FCC, has guidelines established in the event of another NorthPoint-like collapse. That guideline doesn't extend to the cable industry.

It's unlikely @Home will suddenly fold up and discontinue operations. At its press conference announcing the results of its third quarter 2001 performance, officials told analysts and investors of the $138.4 million in revenues it made. Officials also announced the sale of their portal business, a sale which should net millions.

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