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The Almighty Buck

Excite@Home May Have To Call It Quits 329

Posted by timothy from the online-excitement-lies-elsewhere dept.
Plazm writes: "C|net has a story (printer friendly version, of course) that just cropped up this morning about Excite@Home being in financial trouble. Will they befall the same fate as Covad and Loki? Good thing I just purchased my cable modem and broadband service through @Home last week so they could go out of business the next."
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Excite@Home May Have To Call It Quits More

Excite@Home May Have To Call It Quits

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  • Given they're reputation... (Score:3, Insightful)

    by r1ch ( 166865 ) on Monday August 20, 2001 @12:40PM (#2198056)
    for (no) customer service, it's not really surprising. I have never heard anything positive said about excite@home
    • Everyone's got a story. Mine has, for the last 18 months, been very positive. In addition to a consistently stable and fast connection, I've even experienced suprisingly competent network support.

      I'm running a linux firewall on a static IP in front of my home network. Life without @Home would totally suck.
  • Who will be left if Covad and Home went?

    Pacbell?

    That sucks! Why is broadband failing, that is a question.

    StarTux

  • I have a DRY sense of humor (Score:5, Funny)

    by docstrange ( 161931 ) on Monday August 20, 2001 @12:40PM (#2198058) Homepage
    I can see it now. Hungry unemployed IT workers lined up at the @homeless shelter.

    • Blame it on Pets.com and their shareholders (Score:5, Interesting)

      by BigBlockMopar ( 191202 ) on Monday August 20, 2001 @01:01PM (#2198220) Homepage

      I can see it now. Hungry unemployed IT workers lined up at the @homeless shelter.

      Ugh. The wolf is @ our door, boys and girls.

      I blame it all on people who were stupid enough to buy shares of a company that promised to save consumers money by FedExing a $4.00, 30lb bag of kitty litter across the country. $21 shipping bill later, two day delivery time, versus going to the local bricks-and-mortar pet shop at the local mall, shelling out $6 and having a happy cat right away.

      <sarcasm>There's a good business model. How can it fail?</sarcasm>

      <more_sarcasm>Now that e-tailers have been brought back to reality and Napster is dead for all practical purposes, there's still no reason for broadband. No need for the convenience and power of having all the world's information at your fingertips. No reason why an AOL dialup account can't satisfy all your surfing needs.</more_sarcasm>

      And now, as a result of idiocy of that scale across virtually the entire stock market, I find myself unemployed and unable to find a decent job. This really sucks.

      • <more_sarcasm>Now that e-tailers have been brought back to reality and Napster is dead for all practical purposes, there's still no reason for broadband. No need for the convenience and power of having all the world's information at your fingertips. No reason why an AOL dialup account can't satisfy all your surfing needs.</more_sarcasm>


        Like d00d! U can't be serious! What about the pr0n ?!? We NEED broadband for the pr0n !!!! Oh PLEEZE don't take away my pr0n !!!


        --

        Garett

      • And now, as a result of idiocy of that scale across virtually the entire stock market, I find myself unemployed and unable to find a decent job. This really sucks.

        Welcome to the real world.

        May I repeat what you said? Thanks...

        unable to find a decent job

        See that? I'm crying. Oh, woe is you. That's called capitalism. That's the "old economy" for you.

        <tangent>
        Who the hell came up with this "new economy" slogan anyways? Exactly what is so "new" about it? Nothing, other than the fact that a bunch of young, naive idiots managed to convince some old money that their ideas were "foolproof" as in "you fools can't tell we've got no idea what the hell we're doing."
        </tangent>

        Are you a "new economy entrepreneur"? I don't think so. You're posting on Slashdot so I assume you have some common sense. But here you are whining about your misfortune. Are you mad you were suckered in too? Are you bitter because you feel it was "owed" to you? Do you think you have it hard? You're probably an intelligent person and you can probably actually perform your job duties. That alone puts you ahead of most of the other lobos (think lobotomy) "looking" for a job (more accurately, looking for a new job that's exactly like their old job).

        Those of you who find yourself unemployed had better start flipping burgers and stop wallowing in your own misery. Maybe try and industry that isn't part of the "new economy."

        Find yourself a "decent" job (you know, those kind that pay real money, not future riches). Try civil service. Perhaps the police, fire department, military, IRS, FBI, etc. They're not going away any time soon.

        If you can't find a job locally, it's time to move. "Oh, I can't move, I love it here." You'll love it too, when you can't pay your rent and you're out on the street.

        Take charge of your life.

        You took a chance at (fame and) fortune and you lost. If you don't want to lose, don't play the game.

        You'll never get rich when you're unemployed.
        • You're posting on Slashdot so I assume you have some common sense.

          ROFLMAO! They need to mod your post to +5 Funny! By far the funniest post I've read today :)

        • Not Lamenting Capitalism. (Score:5, Interesting)

          by BigBlockMopar ( 191202 ) on Monday August 20, 2001 @02:23PM (#2198830) Homepage

          Welcome to the real world. See that? I'm crying. Oh, woe is you. That's called capitalism. That's the "old economy" for you.

          Very, very true. And, based on the karma hits I've taken for espousing a Libertarian philosophy, I do want you to understand that I'm not down about that.

          The problem is that tech seems to be a bad word now, especially to headhunters. I don't have 14 university degrees; what I have is a practical hands-on ability, honed by 17 years of computer experience, to make systems work in real-world environments.

          Have you been to a headhunter lately? It pains me when they're asking for MCSEs. *MCSEs*. I used to have MCSEs under me; they'd ask me questions like why they have to type an IP address to point to a domain name server, or how to prevent HIMEM.SYS loading when the machine starts up. (I've ranted about this on Slashdot before.) It's a paper qualification, not indicative of any real insight into how a Windows machine works. Nor do I even wish to be trapped in the Windows prison. Yet, headhunters seem to want it. [sigh]

          Who the hell came up with this "new economy" slogan anyways? Exactly what is so "new" about it? Nothing, other than the fact that a bunch of young, naive idiots managed to convince some old money that their ideas were "foolproof" as in "you fools can't tell we've got no idea what the hell we're doing."

          Engineering saying: Make something foolproof, and someone comes along and builds a better fool.

          But here you are whining about your misfortune. Are you mad you were suckered in too? Are you bitter because you feel it was "owed" to you? Do you think you have it hard? You're probably an intelligent person and you can probably actually perform your job duties.

          I like to think I'm intelligent. Actually, I did write the Mensa test, and I passed it. Even went to a couple of Mensa meetings, but got bored with hanging around with people who had nothing better to do than attempt to demonstrate to each other how intelligent they are.

          No, I didn't get suckered in by the new economy. The problems were evident all the way along. For the most part, it's failing e-tailers that seem to have dragged everything else down. Well, using a mail-order analogy, why would you buy a bag of kitty litter by mail-order when there's a pet store right down the street?

          E-tailing, of course, has its merits. Mail order (which is all that e-tailing really is) cannot be beaten as a way of buying specialized items. Antique car parts. Strange transistor types. Even that needlepoint pattern that my best friend's girlfriend has been looking all over for.

          In the frucus before the bubble burst, it seemed that people had lost sight of common sense, and we've all been dragged down because of it. I lament *that*, not capitalism.

          That alone puts you ahead of most of the other lobos (think lobotomy) "looking" for a job (more accurately, looking for a new job that's exactly like their old job).

          Well, I'm not looking for something exactly like my old job, no. I'd prefer something where my combination of electronics, computers and technical writing experience can work together to save/make my new employer money. But, at this point, I have a friend who is a tow truck driver, and I've been moonlighting doing that and a few other things to pay the bills.

          Maybe try and industry that isn't part of the "new economy."

          Certainly have. There's no aversion for me to work for a bricks-and-mortar company. I've never worked for a start-up. I've always worked for established companies. That's not to say that I wouldn't love the excitement and pace of a new venture - I would. All the run-off from failed dot-coms are swamping every other sector, and that makes it pretty hard for your signal to rise above the noise and reach the ear of a potential employer.

          One of the reasons I've been posting to Slashdot a *lot* lately is to get myself heard by like-minded people who might even be in hiring positions. So far, it's worked reasonably well, I've been getting hundreds of hits a day to my website, and many of those hits check out my resume.

          Try civil service. Perhaps the police, fire department, military, IRS, FBI, etc. They're not going away any time soon.

          I live in Toronto, and I've already done that.

          I'm an able-bodied white, anglo-saxon protestant male. WASP. With employment equity in full force across all levels of Canadian government, I submitted my resume, clicked off the boxes asking me my ethnicity and stuff, and received a couple of e-mails back telling me that I didn't reflect the demographics they desired.

          If you can't find a job locally, it's time to move. "Oh, I can't move, I love it here." You'll love it too, when you can't pay your rent and you're out on the street.

          At this point, gladly. Gladly. I live in Toronto, the heart of all of Canada's commerical and industrial activity. Toronto is Canada's equivalent to New York, Los Angeles, Chicago and Detroit all rolled into one. And it's still pretty dead here. Ottawa is the other option, and it's very similar to Silicon Valley; it's even got the nickname, "Silicon Valley North". With Mitel, Corel, Nortel and innumerable failed start-ups, it's hurting even more than Toronto. So, unless an employer were to see my resume and decide that they wished to sponsor me for immigration into the United States, those are my options, and Toronto is decidedly better than Ottawa at the moment.

          Take charge of your life.

          Of course. I'm motivated almost to the point of obsessiveness about reaching goals.

          It's hard to stay optimistic and upbeat when you set a goal of finding a job by the end of the week, and again it doesn't happen.

          I've stood at Bay and King (Toronto's equivalent to Wall Street) in my best suit, holding up a sign that says "Computer Geek For Hire.... Will Work For Bandwidth". Because of the humorous and practical approach, I got a lot of attention - even so far as a couple of TV interviews. Got to pass out lots of resumes and follow up with lots of people who gave me business cards.

          And from all that, *one* interview. One. I present myself well, and I'm friendly and professional. Needless to say, I didn't get that job. (They were looking for an Assembly language programmer. I haven't written in Assembly in over ten years now.)

          Even though I remind myself that it's a numbers game, the truth is that when someone quits a job in the IT department at a bank or something, generally, they don't seem to re-hire.

          Computer geeks seem to have become about as desireable as 8-tracks.

          You took a chance at (fame and) fortune and you lost. If you don't want to lose, don't play the game.

          Don't have much choice, do I? Again, I'm not lamenting capitalism. I'm lamenting the idiocy of those who built the tech bubble up so much that when it burst, it affected companies and people with sound business ideas and skills.

          You'll never get rich when you're unemployed.

          Tell me about it.

          • Well spoken.

            That's not to say that I wouldn't love the excitement and pace of a new venture - I would. All the run-off from failed dot-coms are swamping every other sector, and that makes it pretty hard for your signal to rise above the noise and reach the ear of a potential employer.

            Your initial post could have been any dot-commer crying about how their future is ruined. To be honest, what scares me is that "noise" is applying for jobs well above their head (and ass, they're in the same place, right?).

            My job is fine for now, my boss wouldn't fire me for the world, but at the same time, I can't believe all the HTML web-monkeys who think they should be sysadmins/programmers just because their VCR doesn't flash 12:00. If I had to compete against these morons, could I?

            Your frustration appeared (to me) to be dot-com-whiner syndrome.

            You do raise a valid point that I think is important to reiterate.

            The run-off is polluting the geek pool. But if you're swimming in the shallow end with the rest of the lobos, just stand up. You'll be heads and shoulders above the rest.

            Perhaps you might want to try another headhunter. If they're not selling your skills (despite people wanting MCSEs -- maybe you should get that cert if it will get you a job) then it's time to switch. Maybe you've done that and still no luck. If that's the case, I'd go out on my own and sell my services. Get creative. If you're not going to get the job anyway it can't hurt to go a bit overboard trying to convince a potential employer that you're the right one to hire.

            I'm not saying it's easy, and I'm not saying I can do it. But I realize it can be frustrating and it seems to me that you are one of the few the signals above the noise (run-off).
      • Y'know what?

        They shut off my 400kbit-max Ricochet pipe a couple of weeks ago.

        I broke back to using my 56(53(49))kbit-max V.90 phoneline modem.

        I only miss the FatPipe[tm] when I want to see the Really Large Streaming Video, which is about once a week.

        Then again, 10 hours a day I'm at work where we have enough BW to melt all those unlit transcontinental sillystrings.

        --Blair
      • This is getting off-topic, but initially, pets.com would ship 40lbs of premium cat food costing $50 for about $5. And since I could schedule repeat deliveries, I was able to save time and money, and still have cat food always on hand.

  • Why? (Score:2, Interesting)

    by NineNine ( 235196 )
    Does anybody happen to know WHY these cable Internet companies are going under? They have more business than they can keep up with, which is usually a good thing, unless you're not pricing your product high enough to make a profit. Is that the problem? I'm really stumped, here.

    • Re:Why? (Score:3, Insightful)

      by Anonymous Coward
      I think the problem is, they don't know how to run a business. They're just the next wave of dotcoms, essentially. They don't realize that you shouldn't start throwing money at everything you possibly can. You gotta make your revenue exceed your expenses, otherwise you fail.

      That's really such a simple concept, I don't know why no new businesses seem to understand that.

      • Re:Why? (Score:3, Insightful)

        by Alien54 ( 180860 )
        The way I see it:
        1. have a dotcom business plan. Original incestors get in, get rich, sell out.
        2. Adopt the typical bean counter attitude of "Anything that is not a profit is an expense" Start cutting expenses. (I am reminded of an old cartoon where picture used to illustrate reducing everything to core elements was an apple with all of the meat of the apple eaten away, leaving just the core)
        3. Have some competitors who are willing and able to help push you over the edge by being slow on service to your valued accounts
        4. have a business plan that accumulates profits too far in the future.
        5. etc.
        You get the idea

        (yes I see the typo. I was going to fix it, then thought better of it)

        - - -
        Radio Free Nation [radiofreenation.com]
        is a general news site based on Slash Code
        "If You have a Story, We have a Soap Box"
        - - -

        • they don't know how to run a business. They're just the next wave of dotcoms, essentially

        Yup, except that the physical cableco's have capital to borrow against, so will dig themselves into debt rather than burn venture money.

        The whole broadband arena seems to one big ego and cock measuring exercise. A cableco spots a telco talking about how much they're going to make out of broadband once they're the biggest provider, and decides that they're better throw a few hundred million at it to ensure they they're the big dog. They all hire analysists who loyally produce the figures they want to see, that show there's money in them thar cables. Where? Content is king on the TV, but not on the internet. The internet is the place where we provide content to each other. Why don't the providers get that? Why?

    • Re:Why? (Score:2, Interesting)

      by sinan ( 10073 )
      Let's do the math. $45 per month. It costs about $100 to send a technician to your house for customer service. One service call and they are out of two and a half months revenues. That is revenues, not profit. If you amortize it with profits, then they are out more like a years profits. So if 8 percent of people have a truck roll once a year , that is a zero profit situation. I always said the service model is unsustainable at $45 per month. I think they have to go to a tiered service model. No customer service should be $45 per month. For that you should only get line problem calls and no service once the signal is in your house. If you want customer service it should be around $80 per month. Only one false alarm , on premises call would be allowed per year for that price. Anyhting after that would be chargable to the customer at $50 per call. Computer help would be available thru their installed software by remote access. I've had @home for 4 years, and very happy with it. The last time I called them was 30 months ago, when the modem died and they replaced it. I pay for 3 computers. I also have 5-static IP DSL from Qwest ( for 3 years now) and that costs me $80 per month. I am happy to pay the price as long as it assures my ISP's survival.

      The way it is now it is unsustainable. In my opinion the service (@home) is worth easily $80 per month, and I'd be willing to pay $120 per month if they allowed me to run httpd .

      sinan
      • Good post. I'd personally be willing to pay much more if they'd just let me run a mail and web server for my own usage. The only way to do that is to place some sort of usage cap (as in, per gigabyte or something, not a bandwidth throttle).


        The nice thing about cable is the speed. Burst of speeds in short periods are the best (like when scarfing a futurama episode you missed and can get 200 megs in two minutes). If you want to use 50 gigs a month, there should be a pricing option for that too.


        I can't understand why they don't permit tiered service. Your biggest support costs probably go to supporting the lower usage person. Those that are willing to pay extra for bandwidth, want to run servers, etc, probably are savvy enough not to need technical help. They are willing to pay, and the only cost is the larger infrastructure to support the greater traffic, so amortize that in along with a profit and get more business.

  • They suck anyway... (Score:1, Redundant)

    by DraKKon ( 7117 )
    Who cares.. Crappy service.. you die.
  • my hopes to hear the Buggles do an update and re-release called "Internet Killed the Video Star."
  • My sister worked at a Wherehouse at a local mall which went of business. She got a job at this pizza place which then went out of business. Then over to Kmart whose stock turned to junk bond status. Guess I should ask where she's working these days...

  • so much for competition in Canada (Score:3, Interesting)

    by issachar ( 170323 ) on Monday August 20, 2001 @12:42PM (#2198074) Homepage
    So if excite@home goes under, does that mean large chunks of Canada will only have one broadband ISP? (Telus in BC & Alberta as both Shaw & Rogers networks are part of excite@home).

    If so, will Telus (or whoever it is in your province) leave broadband at $40CDN a month? Are the rumors that they're required by the government to keep it that low really true?

    And even more importantly. Do we get to keep our cable modems? ;)
    • No, @home in Canada is used for it's content and some of the backbone services, but, Shaw, rogers, etc own their own networks. @home doesn't own them. Think of it as a partnership for content and some, but not many services. (Shaw has actually been getting away from using @home services directly anyway).
    • Shaw is a seperate entity from Excite. They just share name brand recognition, most of the same AUP (I noticed the Shaw AUP is worded much more openly in terms of servers, in parts... reads basically like 'don't bugger the system and we'll look the other way' :D ), and from what I understand, Shaw is making decent money off their internet services.
    • The CRTC was mainly focused on Telus etc providing other ISPs with DSL provisionability at reasonable rates (ie $50/month).


      It does not directly focus on costs towards the customer. It just means that it should offer wholesale service for xDSL to ISPs at a price that would allow them to be competitive. (Kind of silly, really... and Bell etc got around it anyway with the concept that the price & profit could be achieved with only 5,000+ customers)


      If they wanted to jack up the price, I'm pretty sure they could. They'd just have to allow other ISPs to offer at the same amount.

  • The article mentions AT&T being their biggest investor, but I was wondering if this affects AT&T@Home customers as well (namely me)...

  • ...on the death of dialup and whatnot.


    Broadband too cannot be supported, especially with the baby-bell competition hitting the area. I'd honestly prefer to pay $70+ if it would keep the competition and quality available.


    I'm just glad I'm on DSL instead of @home... (switched 8 months ago)

  • I know they're not out of business yet, but with the threat of being delisted from NASDAQ in the very near future things dont look good... times like this I'm glad to be Canadian, and living in an area that only gives you 2 choices, Cable or DSL. Having less choice isn't really a good thing, but it's better to have 2 large, stable companies to choose from then 6 or 7 smaller ones with uncertain futures.

    I'm sure someone else *cough*AOL*cough* wouldn't mind expanding their own network by taking over Excite@Home...

  • ...NOT. this guy should have been fired for talking up all of these companies.
  • Really, now. There's a huge demand for broadband, but no one can seem to stay in business even with hundreds of customers (both consumers and businesses) forking over lots of money each month for the service.

    In an era of dot-coms with no revenue stream whatsoever staying in business for years, how is it that these companies are going broke?
      • how is it that these companies are going broke

      Well, see now, Mr Dollar goes out of the building, and around the block, then he never comes back. That makes Mrs Dollar and all the little Quarters very sad, and they pack their bags and follow him off to the happy land of The Mainstream Economy.

      Sorry, I know you know that, I just couldn't resist pointing out how idiotic these companies are being. And the reason why they're filing for Chapter 11 (or 7) while .bombs kept going for years? I reckon it's because they actually have well defined products, and their investors can understand what it is they're trying to do, and see that they're failing miserably.

  • Loki isn't gone yet! (Score:3, Informative)

    by FortKnox ( 169099 ) on Monday August 20, 2001 @12:52PM (#2198156) Homepage Journal
    Will they befall the same fate as Covad and Loki?

    Loki has just filed chapter 11 (protection from creditors) not chapter 7 (liquidation). Please don't call Loki gone until they do. They still have a very good chance to pull through.

    Other major organizations have filed chapter 11, and still are major companies to this day. Sorry this is a touch off topic, but Loki ain't dead yet.
      • Please don't call Loki gone until they do. They still have a very good chance to pull through.

      Why? Really, back that up. I also appreciate what they're doing and wish them the best, but, my budget is $40 a month for my cable modem + $0 for content, because $0 is what I have to pay to get the stuff I want, and I don't see that changing in the immediate future.

      So, where exactly do Loki expect the rescue money to come from?

  • @Home killed themselves when they merged with Excite: @Home, which had a solid prospect of a large scale profitable business, decided that they just HAD to dilute their value by merging with a absurdly overvalued search engine that was headed into the great abyss (Excite has been on a major decline while engines like Google conquer the market). While they've tried to make some value out of the Excite merger, as an @Home customer I have never used the Excite pages except to transition to the member services pages. Even the so called "Broadband" version is simplistic and borish.


    As another poster mentioned though, @Home really is marketing and some peering agreements: I'm on Cogeco and they will continue if @Home fails, and likewise Rogers and Shaw will be just as strong.


    It's ironic that this is occuring right now as I just finished reading the National Post over lunch, and one of the stories detailed the fact that cable modems are being installed twice as fast as DSL. You would think that these would be the good times for @Home.

    • This was a naked bailout of Excite and its investors (Kleiner Perkins) by the stronger @Home. Never should have happened. KPCB made out like bandits while everyone else got toasted.
    • cable modems are being installed twice as fast as DSL

      The problem with that statement, as usual, is that it ignores the fact that DSL was rolled out more places 2 years ago.
      (disclaimer: I'm in Toronto, so will ignore Telus' Western operations for the moment)
      I signed up for Sympatico's DSL the month after it became available, January 1999. At that point, @Home's projected availabillity in my neighbourhood was Summer 2000. Then it was Fall 2000. Then it was "Please check back for availability." My upstairs housemate switched from Sympatico to @Home as soon as it became available, namely earlier this year.

      So, while it may appear that cable modems are being installed at twice the rate of DSL now, it doesn't take into account how much earlier DSL was available over the last 2 years.

  • I have been a customer of excite for over a year now and have been pleased with what they have to offer.

    Of course, here in Oklahoma the bandwidth is plentiful, except right at 5:00pm and for about 30 to 60 minutes thereafter.

    I have even been impressed with their technical support. All you have to do is tell level one support things you know they can't comprehend and they bump you right along. Level 2 is pretty proficient in most regards. On to the point of this post....

    In my opinion these ISPs are dropping out due to the burden of competing with simpler solutions, ie AOL and the like. Notice I did not say better solutions, just simpler to the average joe schmoe, I don't know a god damn thing about computers. These burdens I speak of is infrastructure. The cost of deploying the connectivity and not being able to convert the AOL magots.

    They then tend to get into the pitfall that we need to conquer more areas and that gets them into dept and without a controlled growth rate that they can easily fund themselves they become so overwhelmed in debt that they topple under the load.

    Well, my two cents, do with as you will

  • As so many other Canadians have chimed in, broadband is thriving north of the border. I love Rogers@Home, except for the few months a while back when they were totally fuggered up....

    My cable's been solid as granite for the last several months, and I've had nothing but love for it.
  • Sheesh, if they can't make money charging their current prices, stop expanding. Wait for a while. Hold it out. Wait till the money starts coming in, but please, I'm paying them something like 35 bucks/month, so are many of my neighbors. If they just sit on their ass for a while and stop expanding like the plauge, they won't keep digging themselves into debt.
  • I know that I'm about to commit some kind of /. heresy by saying this, but I LOVE MY @ HOME SERVICE! I've had it in two apartments, got super-fast installation (in the case of the 2nd apt, they showed up on the day I moved in... I had @home server before I had phone service). I also have a static IP, for which I do not pay extra, but I hear that they are moving away from that.

    But, I will say that I only use it for the fat-pipe aspect. I don't use their email and don't use their web-hosting service (host my own, baby... and they haven't filtered web server traffic/port 80 as some people say they have.)

    Please, oh please, don't make Pac Bell the only fat-pipe provider in CA/SF Bay Area. If it takes months to get installed and people calling for customer service are on hold for hours, how bad will it be if Covad and @home crap out?

    "Hello, Pac Bell DSL? Yes, I'll hold... yes, I am bent over... yes, the broom stick handle does have splinters...yes, I will call you 'Daddy'..."

  • Possible reason (Score:5, Informative)

    by Arethan ( 223197 ) on Monday August 20, 2001 @01:04PM (#2198237) Journal
    I used to work for an @Home MSO. (I forget the meaning of the acronym, basically they resell @Home internet connectivity over their own cable lines.) Well anyways, after the initial year of the 5 year service contract with @Home, a lot of them employees stopped liking them so much. In fact, a lot of the IT guys that were really happy with @Home's network layout, were getting kind of upset with their technical contacts within @Home. Stuff like poor response time, terrible email/news server uptimes. Generally, customers would bitch and bitch about miscellaneous problems with their service, and @Home would take weeks to fix them. Even minor issues would take days. (How hard is it to kill an email account and create a new one with the same name?!)

    So what is the solution? Simple. You have a customer base, you have people pratically breaking your doors down to get your service, but you can't stand the ISP you're going through. Let's see...cable company with lots of money...needs high speed internet backbones...money...backbones...hey, doesn't MCI, the Bells, Sprint, Qwest, and about 100 other telco/data service companies sell internet connections??? Hey, lets get our own OC-192!

    And thus, @Home doesn't get the contract renewal when the current one runs out. Not only that, but these contracts are specified in terms of geographical area, not just in terms of the companies that signed it. So, if the cable company expands (which they always are), nothing says that the new customers have to be @Home customers. The cable company can use their revunues from existing @home customers to build an independant infrastructure, and use that to independantly serve all new customers outside of the original area.

    Result? @Home doesn't make enough money to cover their startup costs. And they file chapter 7 within years of initial creation.

    • Re:Possible reason (Score:3, Informative)

      by Bangback ( 471080 )
      The above message is a good explanation.

      I looked long and hard at investing in @Home since they had a dominant position and just kept getting cheaper. The biggest problem is that all their contracts are up in the next year or two. So even if they were making money hand over fist now, there's no long term business. They won't get such a good deal as before when there was no market and they were giving away huge blocks of stock (@home was largely given to the major cable providers to get them to use it initially). Comcast and Cox (two very large providers) have already cancelled their contracts effective December 7. (Funny those press releases from a year ago extolling their relationship to 2006).

      Plus looking at their financial announcement, they're only getting about $15/month/subscriber for mail/news/DNS/long-haul links. The rest goes to the cable company which provides marketing/installation/technical support/local loop (for the gripers -- most of their lame tech support is at the local cable company -- mine is incompetent but friendly and quick to answer the phone). Now that long-haul links are cheap and they're on the ropes with close sibling AT&T Broadband you can imagine what the renewal rates will be.

      Bangback
  • It seems to me that @Home suffers from the same disease that a lot of other broadband providers do -- they don't really care if you're their customer or not.

    This can be seen in their terrible customer service (and I don't just mean tech support) -- I've never seen a company where the sales team was less inclined to help you subscribe. It's as if I signed up for a magazine only to be told I had to staple the thing together myself.

    I realize that individual customers don't mean a lot when you have a few hundred thousand, but they must treat everyone this way. That's *got* to hurt the bottom line.

  • Jeez Timothy! (Score:2, Informative)

    by dzawitz ( 2120 )
    Can I use my moderator points to mod down this article as ignorant? Is Tim ever going to learn the difference between Chapter 11 bankruptcy and liquidation? "Calling it quits" and filing for Chapter 11 are not the same thing, man.
      • "Calling it quits" and filing for Chapter 11 are not the same thing, man.

      Let's make a deal. You take the time to post a list of publically listed companies who've filed for Chapter 11 and recovered, and I'll followup with a list of ones who've filed for Chapter 11 and gone titsup. I'll even do you two for one. Go on then.

  • [[ full disclosure: I work for an @home company ]]

    I don't think that the subscribers are going to get hurt here. @home is controlled by AT&T Broadband, which itself is "on the market", being wooed by many companies. Many of these companies are particularly interested in @home's 3.6 million subscribers.

    Even if @home tanks, (which, I have no reason to think it will not) AT&T, and whomever buys it (which is pretty much a foregone conclusion at this point, just a matter of who, for what price) has great reason to keep the current subscribers very happy in the near and long-term future.

    [[ further disclosure: This shouldn't in any way constitute as "insider information". All of this is my speculation, gathered from multiple internet sources, all of which being available to the general public. @home does not keep its employees informed. ]]

  • Is it possible... (Score:2, Interesting)

    by KC7GR ( 473279 )
    ...that @Home's rich crop of spammers just might be to blame for their current troubles?

    Think about it: Lots of admins (myself included -- I have LARGE amounts of @Home's IP space in our mailserver's local 'Deny' files) start blocking mail traffic, legitimate or not, from @Home's IP space due to spammer infestations. Personally, with only ONE exception, every single piece of mail I've seen from @Home in the past two years has been spam.

    Anyway, @Home users get ticked off because, all of a sudden, they can't mail baby pictures to Aunt Gracie on Orville's Internet Service in Flyspeck, OH. Why? Because Orville's is blocking traffic from @Home. Orville's other users AND admins were complaining about the spam load from @Home, and Orville himself decided to do something about it.

    Ticked-off @Home customers bail when @Home can't/won't do anything about their network's spammers. @Home loses revenue. @Home's share price drops. @Home sinks like the Titanic.

    At the risk of sounding mean and nasty, I'm not going to cry very much for @Home. Their demise means only one thing to me: Less disk space taken up on my servers due to reduced size of my 'Deny' file.

    Keep the peace(es).

  • @home is the 'backend' (Score:3, Interesting)

    by BroadbandBradley ( 237267 ) on Monday August 20, 2001 @01:19PM (#2198337) Homepage
    Cable companies give you the link to the @home backbone, @home gives web access, mail, homepage, startpage, and a stupid browser skin...

    Cable companies are doing fine, they'll just need to dump you out onto the web from somewhere else and find you a different email service. Personally, I think what they offered as a start page was revenue generating comercially driven trash. Sales pitches weaved into the headlines like they're something new and all that kind of lame stuff. I'm going to be glad to see them go. this will speed up the opening of cable networks and give options when you sign up for cable modem connnections.
    • Do I ever have a deal for them... if they just alter that pesky AUP, I'll run my OWN mail server! No more admin costs for them! ;)
    • Amen to local control!

      I have to say, I saw this coming back when we had the story about @Home dropping the high-traffic movie newsgroups. Can anyone say bandwidth cost cutting?

      I live in Sacramento. @Home has me routing through San Francisco. If I want to connect to something in Sacramento, my tracert shows it travelling all the way to the SFBA router, out a backbone provider, back on Sacramento. This is because @Home doesn't think it is cost effective for Sacramento to have their own NOC/POP.

      Not to mention, it is @Home that sets these assinine policies. When Comcast first planned to bring @Home service to Sacramento, they priced it out (and beta tested it) at 3000kbps down and 400kbps up service, just like a few of the Canadian @Home companies. But apparently when the service went live, @Home did not want to have that kind of traffic running through their already-bloated SFBA pipes and so the service was quietly dropped back to 128 upstream. Also, even though @Home owns a buttload of Class A/B address blocks they continue to insist on charging $7 a month for each extra IP...the same price as leasing a second cable modem. This forces everyone to use NAT/ICS which then means if you ever have trouble you have to disconnect everything, reconfigure a single machine for access, install their crappy NetDiags tool before they will open a trouble ticket.

      No thanks. The first thing I hope happens after @Home dies is the introduction of several new levels of service, such as "basic" and "advanced" with different levels of service, such as faster upstream, permission to run non porn/warez servers, additional IPS...just like DSL providers.

      Oh, FYI...no one on @Home will be able to change their password for the past couple days because the ONE SERVER responsible for providing that service had a hard drive crash and is still down.

      - JoeShmoe
    • Cable companies are doing fine, they'll just need to dump you out onto the web from somewhere else and find you a different email service.

      Very good point, but i think you're overlooking something.

      What's to assume that other companies would be able to succeed where @home failed? According to a post above, (which I don't know if it's accurate, but knowing how much telco loop costs, it sounds reasonable), the ISP will get roughly $15/mo/person.

      $15/mo/person for bandwidth is nothing. We get less than that for dialups, but luckily they can't use more than ~53k/s, and we have lots of them, so we can manage, though barely pull a profit.

      Now you can see, $15/mo for a cable modem's worth of bandwidth, it's just not going to fly, unless the ISPs service sucks beyond belief.


      Also the cable modem type of service requires a lot more manpower, as unlike a dialup modem, installation time and repair time is put a burden put on the provider rather than the customer. Also dedicated access means a lot more sysadmin related problems (codered, random hacking, etc).

      I think the problem with the market is prices are simply too cheap. $45/mo is simply too cheap for broadband service, as witnessed by company after company going out of business (Covad, @Home, etc.)

      If anyone could pull this off, it would be @home. AFAIK, they own their own backbone, so theoretically once they pay off their bonds, they'd be in much much better shape than anyone else. They have a good solid distribution channel (the cable lines), which Covad and the dsl CLECs have.

      Being employed as an ISP, i would like nothing better than @home to die. Their pricing borders on predatory at best, stupid at worst. They have lowered the bar such that everyone assumes broadband is around $40~50ish, when realistically no company (as shown by the slew of bankraupcies/near bankraupcies) can make any money at that price.

      • but who is paying for the bandwidth? I mean the cable company where I live operates a sonet network that connects most of the city where I live. beyond leaving the local system and moving on a leased line from say sprint to connect to the @home backbone...who pays for that local-to-@home connection, the cable company or @home? there's no doubt in my mind that the cable company has to pay for field support and install technicians, and the cost of running and maintaining the cable lines, but most of this they already do with video and phone cable services, they all run over the same wire.

        most @home customers would have a better time using my.netscape.com as more features are offered at most web portals (like webmail that @home doesn't offer). @Home was an 'ISP E-Z setup kit' for cable companies moving into uncharted territory. Several gazillion support calls later I think they've decided to go their own as they have several options for ISP services now, and know more what they want from the relationship. ISP's will be like TV networks, people will get a list of a few hundred or so to pick from just like they'd get nickelodeon or discovery channel.ISP's that allowed running a server would be like the premium pay channel

  • Giant Honking Market Opportunity (Score:5, Insightful)

    by dew ( 3680 ) <david@week[ ]org ['ly.' in gap]> on Monday August 20, 2001 @01:19PM (#2198340) Homepage Journal
    If you wanted to get into the broadband deployment arena, now would be a really good fscking time to do so.

    Fiber pipes nationally are wildly underlit nationally, DWDM technology is continuing to advance at a breakneck pace, and, relevant to this article, you'll have have no more competition, save Baby Bell DSL offerings.

    Team up with the power companies! They own the rights of way to metro and suburban wiring ways and "telephone" poles already. (A "telephone" pole should be called a "power" pole because most of the time the telephone company is leasing space from the power company to string telephone wires on it!) They're being hit bad by this whole deregulation bit and are losing quite a bit of money. They'd be delighted to find a potential new revenue stream, especially in a market that's clamoring for access, but has no outlet.

    Supply and Demand -- there's a dwindling supply and a growing demand. Market forces dictate that someone's gotta have the "can-do" to get the power companies to plug people in.

    (BTW, I am not talking about using the power lines for transmission of data (many issues w/that), I'm talking about turning power companies into ISPs by stringing fiber along their rights of way.)

    Someone go out there and do it!

    • If you wanted to get into the broadband deployment arena, now would be a really good fscking time to do so.

      I shouldn't blast you for being entrepreneurial, but knowing the financials behind an ISP, i can tell you why it's not a good idea.

      1) Just because there's a lot of unlit fiber, it doesn't necessarily mean it's entirely dirt cheap. The cost for longhaul lines can easily run into the thousands of dollars. And you can't get fiber to your POP in most places, so you either have to a) plant the fiber yourself, or b) pay your telco a loop fee to get it from your longhauls POP to yours. The latter will also run into the thousands of dollars, the former is obviously a lot larger, but only onetime.

      2) While the power company idea is innovative, I personally don't see how/why it would be any cheaper/better than registering as a CLEC, colocating a few DSLAMs in your local CO, and become a DSL provider, ala Covad. And we all know how Covad fared.

      3) Supply and demand is a well and cool thing to think about, but it's a bit more complex than that. The first problem is that it's engrained in people's mind that the cost is around $40. Problem there, your average total cost is already over $40/person, you can't make any money.

      4) Bandwidth is expensive. Ok not that expensive, but it's a hell of a lot more expensive than $40 for a typical moderate user's use of a cable modem. Owning your own fiber and immediately getting bigenough to be able to peer to the Tier1's is a good way to save money long run, but you'll have to be cash positive in the meantime so you can paydown your debt until you own it yourself. @Home tried this, but didn't do very well as they've had to get bonds from Promethian, whom from what i understand, isn't much more than a legal loan shark.

      5) You can get around #3 by having a higher price. Ok say you charge $60/mo. Who is going to pay $60/mo? only the people who understand Quality of Service, and are going to use it the most. You lose the ability to share the costs with the "light users" whom you make a profit in, thus your costs will go up even higher, as a ramification of your prices going up. neat huh?

      There is not a lot of money in residential broadband, if there is any money at all. The money is in businesses, who gladly will be much higher prices for speeds that may only be semi-decent to a homeuser. Normal businesses typically do not use a lot of bandwidth, which allows the ISP to oversell, and combined with the higher prices, allows the ISP to make money. We sell our residential DSL for $50-60/mo, and i can say for a fact that we don't make a dime on them, thankfully our residential advertising has been belowpar, and thus we haven't lost our shirts over it.

      As an ISP, your best customer is grandma who uses AOL to send email to their grandkids once every other week. Low costs, almost-decent revenue. You don't get those customers with broadband.
        • The first problem is that it's engrained in people's mind that the cost is around $40. Problem there, your average total cost is already over $40/person

        Yup. Surveys in the UK show that the breakthrough point where Joe Windows will switch to always on is only £10~=$15. Once you've had always on, you know it's worth more than that, but this is the price point where the perceived value meets the cash value.

        My own story is that when cable modems were taking off in the UK, I choked at paying £50~=$75 a month, but bit when they dropped to £33~=$50. I'm currently paying £25~=$40, and I know and accept that this price is based on the farcical idea that the cableco will make money selling extra services on the back of the broadband connection.

        As far as I can see, this "content is king" dream world is the same sort of idiocy that gave us the .bomb economy, the only difference being that physical cableco's can go on running up debts for longer because they have capital to borrow against.

        Having experienced broadband, I would now pay £50~=$75 a month for it, and frankly I'd be happier doing that today than waiting and waiting for the inevitable day when my cableco wakes up and realises that they're taking a beating, that it isn't going to get any better, and that always on broadband isn't going to be in the £10~=$15 cost-to-provide bracket for at least ten years, even after writing off infrastructure investment.

  • The problem with broadband in the US (Score:3, Informative)

    by bl968 ( 190792 ) on Monday August 20, 2001 @01:20PM (#2198348) Journal
    It costs on average for a small ISP 1,500-2,000$ for a T1 (1.5mbs) Internet link. This is in addition to the 400-600$ for the local loop charges. It costs 12,000$ give or take for a partial T3 (45mbs). With broadband companies trying to give every residential customer between 350kbps and 1.5mbps of bandwidth for 39.95$ a month, the figures just do not add up. When you provide someone a service they will use it simply because they can. This means that the broadband companies must add additional bandwidth to handle the users that abuse the system. This increases costs and ensures that they can not afford to continue to offer the service. What is required in my opinion is legislation (waits for the boos and hisses to stop) to require the Regional Bell Operating companies to lower the over priced bandwidth costs to the Internet service companies. I do not mean just for the large corporations but also for the mom and pop ISP's in your neighborhood. If the bandwidth is available to the ISP's they can then turn around and make it available for their users.
    • Anyone paying up to $2,600 for a T1 is stupid.
      There are many companies offering services for less that $1000 for unlimted 1.54Mbps with a CIR of 512K. I have even seen a company offering unlimited 1.54 Mbps for $549. Both these pricing uncluding local loop charges.
    • Price caps cause shortages, this is Econ 101 here.
      I'd say more, but it really is a cut&dry issue. Want an example? Think 1970's, America, gasoline, do the math.
        • Price caps cause shortages, this is Econ 101 here.

        The problem with simplistic rules is that you're a buttfucking retard. Oops, sorry, that just slipped out. Really, do the mathematics .

        Broadband ISPs need to drive the price down and get as many customers as possible, so that the low use of Joe and Jane Windows makes up for the sizzling cable of Leeching Larry. They need to poach from AOL, so that they get people who won't figure out how to run servers or bypass their caches.

        A free, open market will not work for broadband, because it's the ultimate Catch-22. Until the price drops (to $20, not $40), it won't be truly mainstream. Until it's truly mainstream, the average usage will be high, so the price can't drop.

    • What is required in my opinion is legislation (waits for the boos and hisses to stop) to require the Regional Bell Operating companies to lower the over priced bandwidth costs to the Internet service companies.
      RBOCs don't often sell bandwidth to mom-and-pop ISP's. Most of the bandwidth sold in T-1 quantities is by either independent but slightly larger entities, or subsidiaries or divisions of long distance companies. I wouldn't be caught dead buying any service from the ILEC unless the only other choice is GTE/Verizon.

      Local HDSL (aka T-1) loops are about as cheap as you'd want them. Any cheaper and your provider won't roll a truck immediately when it goes down.

      Point being, if you don't know exactly what you're talking about, perhaps you shouldn't be proposing legislation, lest you be seen as the same sort of self-interested whiner that begs for perpetual copyright. Nobody owes anyone anything.

      -jhp

  • Still surfing on my TimeWarner RoadRunner cable modem and my BellSouth ADSL modem in Florida!

    Sometimes dealing with a monopoly is nice. (Yes I realize that is a self-fulfilling prophecy.)
  • There were rumors that Metricom and Ricochet were still selling modems up to the day they shut off the network (Aug. 8).

    The auction was done on Aug. 16. There are no details as yet, but the reports read like the spectrum was all the value it had left. The equipment may truly have been sold for scrap.

    Bookmark this Yahoo News search for articles that might soon reveal the truth, or its journalistic equivalent, the facts [yahoo.com].

    --Blair
    • That article talks about Ricochet's "spectrum" space. What spectrum space? Ricochet operated in the 900MHz ISM junk band, fighting it out with cordless phones and microwave ovens.

  • broadband and dotcoms (Score:2, Insightful)

    by jpostel ( 114922 )
    what bugs me about this (and dotcoms) is that the 'normal' business model (the one i learned in college) works on a five year profitability timetable. the idea is that if you can not turn a profit in the first five years, then your business plan does not work. some dotcoms came and went within three years! how does one

    A. get money for a business plan
    B. spend 25% of it on stupid stuff
    C. not get shot by investors

    broadband providers (other than the bells or existing cable providers) seem to be dropping like flies. i know that @home is in bed with att, but what is wrong with @home's business plan? are they trying to grow too fast? are they buying expensive chairs? does it cost more to provide the service than they are charging?

    i personally know that covad has an excuse, because i have dealt with verizon (bellatlantic, nynex, and nj bell before them) on several occasions. in nyc the folks doing installations have been known to disconnect existing service while installing new service and then claim that they will have to charge you to fix the existing service. covad got shafted left and right by verizon.

    until the telecommunication providers are deregulated and re-regulated with realistic rules (many are still from the breakup of ATT 17 years ago) there will be little government help with consumer broadband needs.
  • Ouch. I get my service through Comcast@Home, which continues to advertise @Home service even with their financial troubles.

    My question, though: why doesn't Comcast buyout @Home? They have more than enough money to do so, and @Home provides a service to Comcast that keeps me with the company.

  • F*cking idiots at @Home (Score:4, Informative)

    by frankie ( 91710 ) on Monday August 20, 2001 @02:51PM (#2199001) Journal

    As an @Home customer, it pisses me off that they took a solid infrastructure business and wrecked it because they wanted to be Yahoo. Broadband over cable TV lines -- simple, powerful, doable. By now they should be rich enough to found a quasi-nation and buy an aircraft carrier [google.com]. Or whatever they would want to do with $10^10.

    But no, instead they got feverish with dotcom mania. They really thought that megabit internet access was just a stepping stone to the real money -- banner ad revenue on their web portal. I'm not making this up, honest! That's why they spent $780 million on BlueMountain [cnet.com], a loss-leader greeting card site, among other dot-bombs.

    So now they're low on cash and their backbone needs maintenance (duh). If they shut off cable modem service I'll have to smack someone. I'd rather commute to my office than use phone modem again.

  • bfore you start panicking find out who your network-layer provider really is.

    IUn my case its AT&T through TCI, which they bought.

    Even if @Home goes under I strongly suspect AT&T will contiue to offer my cable modem and just switch toa different ISP servcies provider.

    BTW a few more comments:
    (1) I've had an AT&T @Hoem mdoem for a few yearsnow and generally found it highly reliable. Its porbably area dependant but in my area its MUCh more reliable then the IDSl we had efor awhile.

    (2) I have some pity/sympathy for @Home. They invested TONS fo money in the infrastructure for Cable modem long before anyone knew it would be successful. Inre turn for this early invetment they acquired lock-ind eals with the various low level carriers like TCI to be the onew ISp provider on their lines.

    Flash foward 3 years or so, cable mdoem is finally taking off and AOL and some other big ISPs go whining to the FCC that NOW they want in on cable modems, without having made the risky upfront investment to get it all started. The FCC caves and takes @Home's bought and paid for market advanatge away.

    This was BAD call of the FCC. They really shoudl have at elast given @Home a 5 year period or so onc the amrekt cae alive to establish themselves before makign trhem open the mqrket up to agressive compettitors like AOL and MSN.

    I know I'd think twice about ivnesting early in a new medium, based on what happened here.

  • Remember, Excite@Home isn't the network connectivity provider. They're a "content portal". The connectivity part lives on as AT&T/Time/Warner/TCI/etc.

    Go to Excite [excite.com] and what do you see? "My News". "My Weather". "My Horoscope". "My Chat Events". "Change Excite Colors" (Wow, even Yahoo doesn't have that!). Will anybody miss that stuff?

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