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To: Solid who wrote (16949)	11/12/1999 1:29:00 AM
From: E. Davies	Read Replies (3) \| Respond to of 29970

This is quite interesting. AT&T is playing mind games again. ** News Alert from Dow Jones Online News via Quote.com Headline: AT&T Pressures Excite At Home To Meet Demand For High-Speed Web Access By Wall Street Journal staff reporters Rebecca Blumenstein, LeslieCauley and Kara Swisher DENVER -- AT&T Corp. said it and its other cable partners are pressuring Excite At Home Corp. to do a better job of meeting demand for the popular high-speed Internet-access service. At a daylong briefing on its cable strategy, AT&T executives said Excite At Home's performance was the dominant subject of a recent meeting of Excite At Home and its various cable-TV backers. The so-called summit, which is held quarterly to discuss the coordination of operational and other issues of the cable-access service and is attended by representatives of the companies, took place at a hotel in downtown Denver last week. AT&T's willingness to air its problems is remarkable considering the optimistic tone it has taken on the rollout of highspeed Internet access during the past year. By publicly chastising Excite At Home, AT&T executives clearly hope to pressure it into lifting its performance. At the meeting, AT&T executives said, the company voiced concerns about the quality and pace of field installation, customer support and the maintenance of the critical backbone network by Excite At Home. The last issue is critical for meeting demand for the service, AT&T executives pointed out, saying problems have resulted in slow installations and bottlenecks in some important areas. AT&T added that other cable partners were also vocal in laying out their issues at the meeting. Excite At Home "severely dropped the ball in a number of markets," said Tony Werner, chief technology officer of AT&T's Broadband & Internet unit at the briefing. "They have to get to the point where they can meet 100% of demand." The topic of how best to deliver quality service is one of the many thorny issues facing the coalition of Excite At Home and its cable partners as demand for broadband access increases. Excite At Home has also recently been at the center of a sometimes-contentious internal debate over the terms of allowing other Internet companies on the service. The talks have already frayed relationships and made for some stormy board sessions, said people familiar with the matter. Excite At Home President George Bell said such discussion of how to fix problems on the service is the point of the regular summit meetings, which have become especially important as demand for highspeed access increases and customers expect quality service. "We are very glad to see AT&T focusing on the Internet-access business, and their ambitions are very gratifying to us, since the level of growth we have sustained and the consumer demand we face is something we are working to meet all the time," said Mr. Bell, who attended the recent meeting. "We all walked away from there with more precise planning to make sure all of us can meet the capacity demands." AT&T needs to resolve Excite At Home's capacity problems quickly, because it is focused on signing up many more cable customers than ever for highspeed Internet access. Carl Vogel, chief operating officer of field operations, said AT&T hopes to have a million Excite At Home subscribers by the end of next year, up from the current 133,000 subscribers. But AT&T is somewhat limited in its leverage with Excite At Home, which has binding service contracts with AT&T and its other cable backers until 2002. (Some contracts other than AT&T's expire at different times.) And AT&T bears some responsibility for the problems; earlier this year it fell short in its commitments to persuade its cable customers to pay for the Excite At Home service. Now, AT&T executives said they are anxious to get a first-to-market advantage in a number of critical regions such as the San Francisco Bay area and the busy Chicago corridor. AT&T executives fear that the company could get hobbled by any of Excite At Home's missteps, giving rivals an opportunity to catch up to them by using digital subscriber line, or DSL, technology for high-speed Internet access. High-speed Internet access is expected to grow quickly over the next few years. Dan Somers, president of AT&T's Broadband & Internet unit, said AT&T remains firmly on track with its plans to use the cable lines it has been buying to deliver phone service, high-speed Internet access and digital and interactive television. "No one says that it is going to be easy to do what we are doing to do, but we will do it," said Mr. Somers. Other AT&T officials, however, acknowledged the company is trying to do a lot at once. "We are doing an awful lot of relatively new stuff in parallel," said the unit's Mr. Werner.