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AT&T pulls Excite@Home bid
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December 4, 2001: 8:01 p.m. ET
Others strike multi-million dollar deals to keep service running temporarily.
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NEW YORK (CNN/Money) - AT&T Corp. terminated its $307 million bid to buy the assets of Excite@Home and accused the bankrupt Internet service provider of violating their contract by cutting off service.
Excite@Home's high-speed Internet unit, @Home, turned off service to about 850,000 AT&T Broadband customers over the weekend after a federal bankruptcy judge authorized the battered ISP to end the "burdensome" contracts.
Excite's other cable partners, Comcast Corp. and Cox Communications Inc., are still receiving Internet service. And those companies have agreed to pay hundreds of millions of dollars to keep service running for three more months -- until they can develop their own cable Internet networks.
Cox Communications (COX: Research, Estimates) and Comcast (CCZ: Research, Estimates) agreed on Monday to each pay Excite@Home $160 million for the next three months.
Mediacom Communications Corp., the nation's eighth largest cable TV operator, said it will pay Excite $10 million to provide Mediacom customers with high-speed Internet access through the end of February 2002.
Canada's Rogers Communications Inc. said it also struck a similar service deal for $15 million with Excite.
All the agreements are subject to court approval and come as the cable companies seek to build their own high-speed Internet access networks.
Excite bondholders, who are owed at least $1 billion, are considering whether to seek damages from AT&T.
New York-based AT&T (T: Research, Estimates), which owns 23 percent of Excite, said it withdrew its bid for Excite's assets because the Redwood City-based company violated their agreement. Also, AT&T's new cable Internet access network eliminates the need for Excite's system, said June Rochford, a spokeswoman for AT&T Broadband.
As of Tuesday, AT&T had moved 500,000 of its cable Internet customers to its own broadband Internet network.
So far AT&T customers in Oregon, Washington, Texas and San Francisco have been moved over while those in Illinois, Denver and Salt Lake City will be switched later Tuesday and Wednesday. Those in Pittsburgh, Sacramento, Michigan and the Rocky Mountain region will be moved Wednesday and Thursday while those in Hartford, Conn., will go Friday.
- from staff and wire reports 
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