Excite At Home Shares Rise as AT&T Exploring Ideas
Redwood City, California, Oct. 1 (Bloomberg) -- Excite At Home Corp. shares rose 7.4 percent after controlling stakeholder AT&T Corp. said it's exploring alternatives for its investment in the Internet access provider.
Excite At Home rose 3 1/16 to 44 1/2 in trading of 13.8 million shares, almost double the three-month daily average. Since At Home Corp. unveiled the purchase of Excite Inc. Jan. 19, its shares have dropped about 23 percent.
AT&T may sell its 26 percent stake Excite At Home, or split it into two companies - the Excite.com Internet search service and a provider of online access through cable-television lines, analysts said. AT&T acquired 58 percent of the voting shares of Excite At Home through its purchase of cable-TV company Tele- Communications Inc. earlier this year.
''AT&T may recognize that its real business is in access, not as a media company,'' said David Card, an analyst at Jupiter Communications Inc., a research company.
AT&T wants to use its cable networks to deliver voice, data and Internet services to customers. It will avoid having to pay fees to other phone companies for carrying voice calls on their wires. Shares of AT&T fell 1 3/4 to 41 3/4.
Continuously Assessing
The long-distance telephone company, which soon will be the largest U.S. cable-TV provider, made its statement after the close of trading in New York and after Excite At Home's President George Bell said yesterday that the company was not in talks to be acquired.
The Redwood City, California-based company later issued a statement following the AT&T announcement that it is ''continuously assessing'' its strategic relationships.
Excite At Home Corp. delivers services through cable-TV lines at speeds 100 times faster than standard telephone modems.
Other investors in Excite At Home include cable operators Comcast Corp., Cox Communications Inc., Shaw Communications Inc. and Rogers Communications Inc. Comcast and Cox each have 8 percent stakes. Excite At Home has exclusive contracts with the cable partners to offer Internet access to their customers through 2002.
Excite At Home has 620,000 Internet access customers in 11 cities in the U.S. and Canada. It expects to have 1 million users in North America by year's end.
Open Access
America Online Inc., the largest Internet service provider, is leading the fight to open cable networks as it seeks to offer its customers high-speed access. Cable companies argue that such a requirement discourages investment to upgrade networks to handle high-speed data.
Authorities in Portland, Oregon, and Broward County, Florida, earlier this year imposed an open access requirement on the transfer of cable systems to AT&T, which is challenging both of those decisions in court.
Expectations that more regulators will require open access has prompted speculation that AT&T may de-emphasize Excite At Home and seek a partnership with America Online, which has more than 20 million customers.
''If I were a betting man I would think AT&T will reach some kind of agreement with AOL,'' said Jupiter's Card.
Oct/01/1999 16:30
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