Tentative Internet, cable deal reached

Not all Excite's creditors decided on agreement


Excite@Home reached a tentative agreement yesterday with a group of cable companies, including Cox Communications and Comcast Corp., to keep their customers connected to Excite's high-speed Internet service, according to several people involved in the negotiations.

But not all of the creditors of Excite, which has filed for bankruptcy protection, have decided whether to support the agreement. That means it might not be clear for days whether 2.7 million people in North America will have their cable Internet service cut off.

About 850,000 customers of AT&T, the nation's largest cable company, were cut off by Excite early Saturday after AT&T said it would not pay the price Excite demanded to keep them connected. As of yesterday, AT&T had switched about 226,000 of them to a new Internet access network it has been building to replace Excite@Home. The remainder will be converted over the next week, AT&T said.

The weekend's events were set in motion Friday, when a bankruptcy judge in San Francisco permitted Excite to cancel its existing contracts with the cable companies. Excite then threatened to cut off service unless the cable companies made immediate payments worth far more than the roughly $16 a month per subscriber that the cable companies have been paying to date.

Representatives of Excite's bondholders, the largest group of the company's creditors, demanded that the cable companies pay $50 a month per subscriber for nine months.

An adviser to one of the cable companies said yesterday evening that the proposed deal called for payments totaling $355 million -- or a little more than $40 a month per subscriber -- to guarantee service for three months to all of the cable companies except AT&T and Charter Communications. Like AT&T, Charter has started switching customers to its own Internet access network.

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