Troubles for Internet over cable provider At Home Corp. reached a crescendo this week, but one analyst said Canadian subscribers probably won’t see an interruption in Internet service.
At Home, whose public face is Excite@Home, supplies Internet over cable for Canadian cable companies Rogers, Cogeco and Shaw. On Monday, At Home’s auditors expressed concern about its ability to stay in business.
In April, Redwood City, Calif.-based At Home announced that it was facing a cash crisis, and in June secured US$100 million in a convertible debt deal. The company has been tightening its belt throughout 2001, with approximately 800 layoffs since January, and continues to look for buyers for its Excite portal. Some of At Home’s European operations were shut down earlier this year, and the future of some of its other businesses, such as greeting card division Bluemountain.com and marketing service MatchLogic, remain uncertain.
Since June, At Home’s share value has plummeted. If the stock fails to be listed on American Stock Exchange, New York Stock Exchange or Nasdaq, the US$100 million will have be repaid at once.
According to At Home spokesperson Alison Bowman, speculation of the company’s imminent demise may be premature. “We haven’t received a notification from Nasdaq (and) the auditor’s opinion was rendered prior to the announcement of this cash disclosure that we had back in April. They put this opinion in yesterday, but nothing has really changed since July, since our last earnings call,” she said. “We’re still operating, we’re still serving our cable customers.”
Should At Home fold, Shaw@Home customers won’t see their service cut off, said Shaw spokesperson Kevin MacDonald. Shaw has opened a data centre in Calgary which will be able to pick up service. The cable provider is currently porting all its @Home e-mail addresses to @Shaw.ca.
“We’re quite self-sufficient in terms of what we’re doing with At Home,” said MacDonald. “We’re not as affected as some of the other cable companies because we’ve made a lot of commitments in terms of taking on our own e-mail, our own space, our own infrastructure.”
Rogers did not return calls for comment by press time and Cogeco said it is preparing a statement for sometime Wednesday. However, according to Yankee Group in Canada analyst Mark Quigley, it’s likely all of the Canadian providers will go out of their way to ensure that service remains intact. He remarked that the Internet over cable industry has seen too much criticism over the past year to risk further encroachment on its customer base by DSL providers such as Bell Canada.
Rogers et al “would not be interested in supporting the kind of publicity black eye that it might mean for them if they go through another spate of e-mail and service interruptions,” Quigley commented. “Presumably . . . every effort would be made to ensure that operations did continue, at the very least in the short term.”
