AT&T Corp., gearing up to compete with AOL Time Warner in the cable TV-Internet market, tightened its hold Wednesday over ExciteAtHome Corp. and extended the Web service’s relationship with cable partners Comcast Corp. and Cox Communications Inc.
The new arrangement gives AT&T a majority on the board of directors at ExciteAtHome, which will be scrapping plans to issue a stock that would track its Web content and programming operations.
Under a series of agreements, AT&T will have the right to increase its voting stake in ExciteAtHome to 74 percent from 56 percent. Comcast and Cox can sell their ExciteAtHome shares to AT&T for $3 billion, starting next year.
AT&T Chairman C. Michael Armstrong said the agreement “renews our commitment to ExciteAtHome and really removes the uncertainty that has surrounded our relationship and the future of ExciteAtHome.”
Analysts said the new agreement will ease some investor concerns over the future of ExciteAtHome, whose shares have fallen more than 70 percent over the past year before climbing $3.37, or nearly 10 percent, to $37.69, on Wednesday. At the end of 1999, ExciteAtHome had 1.1 million high-speed Internet customers, more than half of the 1.8 million high-speed subscriber base in the United States. ExciteAtHome extended its distribution pacts with AT&T through 2008, and with Comcast and Cox through 2006.
But the deals don’t end the controversial exclusivity agreements for ExciteAtHome to be the sole provider through June 2002 of high-speed Internet services over the cable systems operated by AT&T, Comcast and Cox–though Cox and Comcast now can terminate the exclusivity or the entire relationship beginning in June 2001.
