Some Cable Customers Left In the Dark

Jim Wagner

Updated · Nov 20, 2001

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
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

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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