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To: Jenne who wrote (20759)	6/7/1999 5:31:00 PM
From: Tunica Albuginea	Respond to of 41369

Jenne: Reuters :"Open access" ruling could hamper AtHome expansion" marketwatch.newsalert.com =v%25reuter&Title=Headlines%20for%3A%20v%25reuter%0A "Open access" ruling could hamper AtHome expansion Reuters Story - June 07, 1999 17:22 PALO ALTO, Calif., June 7 (Reuters) - Analysts warned Monday that AtHome Corp. could be the big loser in a local court decision last week that essentially ordered AT&T Corp. to offer its customers a choice of Internet service providers. AT&T owns a 26 percent stake in the high-speed Internet service provider AtHome, and offers AtHome's service exclusively. Although the ruling only covered the Portland, Ore., market, some analysts said it could make it more likely that other cities and states will challenge AT&T's efforts to maintain exclusive control over its cable lines. However, Merrill Lynch analyst Henry Blodget wrote in a research report that the Portland ruling "increases the risk that AtHome will ultimately lose exclusive rights to the cable lines of AT&T in Portland and other local areas. "It makes it more likely that America Online Inc. will ultimately be available over cable lines, a situation that we believe would economically benefit everyone involved, with the exception of AtHome," Blodget wrote. Blodget said "about half" of AtHome's current market value comes from its exclusive contracts with cable companies, and the risk of losing this exclusivity calls that value into question. AtHome currently has 500,000 consumer subscribers, 2,000 business subscribers and exclusive contracts to be the Internet service provicer to 21 cable companies. Most of these contracts run until the year 2002. Other analysts, while concerned over the ruling, noted it was too early to tell whether it would significantly affect AtHome. "We assume the cable architecture will ultimately be opened up to competition, but it will take a couple of years," said Frederick Moran of ING Barings. He said that could be enough time for AtHome to expand its market share. A spokesman for AtHome Corp. said the company views the Portland ruling as a local decision that will not affect Congress or the Federal Communications Commission. The FCC has already considered the issue twice this year, and in both cases declined to impose any non-exclusivity deals. AtHome stock gained $9.25 to $103.75 a share Monday on Nasdaq. In contrast, AT&T's stock fell 6.25 cents to $53.25 on the New York Stock Exchange. ((--Andrea Orr, Palo Alto newsroom (650) 846-5400, andrea.orrreuters.com))