While the fall of energy giant Enron got all the ink in recent weeks, Excite@Home's bankruptcy may have actually meant more to its thousands of local users. Through a contract with Comcast Corp., Excite provides broadband Internet access to subscribers in the Baltimore area. Scott Allison, vice president of communications for Comcast Online's Mid-Atlantic Division, recently discussed why users were warned that they might lose access and how Comcast's new network will work.
Let's start with what happened. These problems came out of the blue for a lot of users. A few weeks ago they got a note from Comcast warning that their broadband connections might be lost. When did you first hear that there might be a problem?
I don't even know where to start on that one. We were obviously in negotiations with Excite, trying to put together a plan. I don't have the specifics exactly as to how long we were working on those negotiations.
Had it been going on for weeks?
Well, I think that we'd been working for weeks trying to come up with a plan that would provide a seamless transition to customers. Obviously, whenever a company goes bankrupt, concerns about being able to service customers with this sort of product are paramount.
And while you are negotiating with Excite, you have to be setting up your own plan to get your customers Internet access in case you have to go it alone.
That plan looked like it primarily consisted of steering people to NetZero, a free, dial-up Internet service provider with monthly caps on usage.
I think at the time that we first put that notice out we said in the event of a service disruption with Excite we were trying to provide customers some alternative solution. Obviously, NetZero is a narrow-band solution. But, given the fact that we didn't know exactly how the negotiations were going, we wanted to make sure that we had customers set up with some alternative service should the Excite network go dark. Fortunately, we didn't have to worry about that, though.
Well, you got a reprieve. You cut a deal for three more months of access.
Right, but at the same time we have announced that we are going to be rolling out a new network that we've been working on for over a year now. That's going to provide better service and allow us to seamlessly transition customers over. I think that's the critical point. By extending out the agreement with Excite, it allows us to allow our customers time to transition their e-mail from the @Home.com service to the Comcast.net service. This allows us to do that without interrupting customer service. One of the things that we did not want to do was allow the network to go dark. Over the next couple of months we're going to be transitioning everyone off of the Excite service onto our new Comcast network service.
So this will be all done and you'll have everybody transferred before your deal with Excite expires in February?
So there won't be any gap?
Exactly, that's obviously the big goal here. We know how important Internet access is to our customer base. We want to do the right thing for our customers.
Do you have rates set yet? Are the charges going to go up for the new service?
No, the price for Comcast high-speed Internet service will be the same. It's $39.95 a month and $5 if you want to rent a modem. You can purchase a modem through a number of different retail locations.
It must be a very profitable business. I read that Excite was charging you $12 per subscriber and then you charge the consumer $40 a month. Is that same profit structure going to be in place?
I'm not sure.
What does it take on your end to create this sort of high-speed network?
We have to partner with a number of different vendors in order to gain Internet access. So what we're doing is we're working with a number of "best of breed" third-party vendors to be able to help us with the provisioning of the IP address information and different connections out to the Internet. By working with those folks, we're able to move that along very quickly.
So, you're going to have agreements with third-party vendors again. What's to stop them from going bankrupt like Excite did?
The goal on this is that it will be a 100 percent managed network and the vendors that we're working with are all well established within the field. We're pretty confident that by having an end-to-end solution where we're managing the whole network we're going to be able to prevent these kinds of occurrences from happening again.
How many people in Maryland use the Comcast high-speed Internet service?
The only number I have is the national number. It was a little under 800,000 by the end of September.
Did you receive a lot of complaints after you sent out the e-mails warning that service might be interrupted?
No, we got some calls from customers that were concerned about what would happen.
Are you concerned that this might turn people off from getting broadband access?
No. I think if you look at the value of a broadband connection, it is just such a different experience from a traditional dial-up modem. I'm very confident that once we're able to bring our customers over to this new network that it is going to accelerate the growth of this business.
But there are other ways to get broadband; you don't have to go to Comcast.
So do you think that this might encourage people to look elsewhere?
I think that ultimately we're doing the right thing by our customers with this, and that's going to pay dividends. We've taken this whole situation very seriously and we've done the best we can to make sure that customers' service won't be interrupted. I feel pretty comfortable that this is not going to hurt us.
I think that some customers were so concerned about losing access because they were running e-commerce- type businesses using their Comcast Internet connections. To them, losing their link would put them out of business. What would you say to those people who felt out of the loop -- that there were things going on in a California bankruptcy court that might affect their bottom line?
Well, I'd say that our ability to negotiate this new deal with Excite combined with the roll-out of this new network that's going to be 100 percent managed by Comcast is going to provide greater service and reliability so they don't have to worry about this kind of thing happening again.
But in terms of looking back, is there something you wish you had handled differently?
I think we handled it as best we could given all the different situations. Obviously, there were a number of individuals involved with this from the bankruptcy court to Excite to the folks that were owed money by Excite. There were a lot of different folks involved in that process, and I thought we did a good job of handling it.
Do you have any projections for the type of market growth you are hoping to see with this Comcast-run service?
I don't have any specifics on broadband usage, but I do know that our ability to develop this new network is going to allow us to provide new products and services down the road. We'll be able to do video conferencing, secondary IP telephony where customers can actually use it for voice, and also video chat rooms. There are a lot of new products and services that come as a result of the network, so we're excited about our ability to build it.