Excite@Home Goes Wholesale; Renews Partnerships
December 2, 2008 nnyq.com editAT&T (T) and Excite@Home (ATHM) extended their relationship through 2008, while Comcast (CMCSK) and Cox (COX) have extended their relationships through 2006.
The agreements will help facilitate the kind of relationship established by the December 6, 1999 agreement between AT&T and MindSpring Enterprises Inc. and bring third party cable providers to market.
The new distribution agreements reflect a major policy shift toward embracing competitive access on cable networks. Excite@Home and its cable partners are free to focus on developing their high-speed cable Internet services, as well as third-party wholesale services, over the coming years.
In doing so the broadband giant reorganized the governance of the Excite@Home. The move enhances Excite@Home's decision-making capabilities and its ability to capitalize on growth opportunities in the cable access market segments.
Tom Jermoluk, Excite@Home chairman, said the deals confirm that its cable partners are committed to a long-term relationship Excite@Home that would provide consumers with diverse broadband services.
"Our leadership position in broadband enables us and our cable partners to better pursue a wholesale business for third-party Internet Service Providers in addition to our existing business model that will make the cable platform even more competitive with other emerging platforms and attract more consumers," Jermoluk said.
Jermoluk added that the policy shift in no way threatens its cable broadband leadership.
"We believe that as we move into the next phase of leading the broadband revolution, we have the necessary assets to be the leaders in delivering broadband to consumers with our cable partners and wholesale services to third-party Internet service providers," Jermoluk said.
C. Michael Armstrong, AT&T chairman and chief executive officer, said AT&T can work even more effectively with Excite@Home to realize its goals for broadband cable services.
"We can extend Excite@Home across access platforms, add new capabilities of our own, and engage the creativity of third parties, such as content providers and other Web portals, to enrich the service." Armstrong said.
Brian L. Roberts, Comcast president, said the agreements mark progress in expanding its broadband services.
"We have made significant progress in reducing installation time and in expanding the online marketing, OEM, and retail channels that have accelerated our deployment of high-speed cable Internet services," Roberts said. "The extension of our agreements gives us clarity and the ability to continue our aggressive deployment of Comcast@Home."
David Woodrow, Cox executive vice president of business development, said the agreements mark the beginning of a new era in broadband communications.
"This is just the tip of the iceberg in terms of how broadband information, communications, and entertainment services, combined with digital television technologies will dramatically change the way consumers use and view the Internet," Woodrow said.
Specifically, AT&T extended its distribution relationship with Excite@Home through 2008 and agreed to feature the Excite@Home portal on its cable Internet service through the same period. Excite@Home will also work with AT&T to provide connectivity services to other Internet service providers who want to use AT&T's platform to deliver broadband services to consumers.
AT&T reiterated its intention to offer a choice of multiple service providers and portals on its high-speed Internet systems following the June, 2002 expiration of its current exclusive arrangements with Excite@Home. In addition Excite@Home will work with AT&T to deliver services to consumers via advanced TV, wireless and narrowband initiatives.
The exclusivity provisions of the Comcast and Cox distribution agreements with Excite@Home remain in effect until June 2002. Comcast and Cox have also agreed to use Excite@Home to provide platform and connectivity services, and to feature the Excit3@Home portal to delivertheir high-speed Internet services through June, 2006.
Subject to the forfeiture of certain warrants, and based on their other business considerations, Comcast and Cox will each have the right to end the exclusivity provisions and may also terminate the entire distribution arrangement in June 2001.
As a result of the agreements, Comcast and Cox will give up certain veto rights they have at the Excite@Home board and their representatives will resign from the board. AT&T will have the right to elect a majority of the board members and Excite@Home will amend its charter to allow board action by simple majority.
Excite@Home's Jermoluk said the revised partnerships would expand Excite@Home's current business model and create a big opportunity for the company to expand its connectivity and content distribution services.
"Now we are ready to move into the next phase of leading the broadband revolution," Jermoluk said.
The agreements have been approved by a committee of the Excite@Home's independent directors, as well as by unanimous vote of the company's board.
