Shareholders this week approved the AT&T Corp. and Excite@Home deal that grants the telecom giant a 74 percent voting stake in the cable network.

In addition to the realignment of executive leadership, the current board quickly extended the cable access contracts between AT&T, Cox Communications, Inc., and Comcast Corp. through 2006.

Based on the original agreements reached in March, Excite@Home and AT&T extended their working relationship through 2008.

Excite@Home's exclusive relationships with AT&T, Cox, and Comcast will continue through the currently scheduled expiration date of June 2002, unless the Federal Communication Commission steps in with a national broadband policy that states otherwise.

The chance that federal regulator's would move to establish such a policy regulating access to cable headends remains slim. AT&T moved to appease the FCC with its December 6, 1999 agreement to allow MindSpring to become a third party cable access provider by June 2002. Preliminary tests of its shared access system start in November.

After the summer of 2002, Excite@Home will simply be the cable platform provider of choice for its principal partners. The deal also requires that the Excite@Home portal Excite.com search be featured on the cable partners' high-speed Internet service start pages.

Additionally, Excite@Home will work with AT&T to deliver services to consumers via advanced TV, narrowband initiatives and wireless services, subject to negotiation with AT&T Wireless Group.

Overall, the new arrangements expand upon Excite@Home's current business model and represent a significant opportunity for the company to provide cable connectivity and content distribution services to its partners.

George Bell, Excite@Home chairman and chief executive officer said the approval paves the way for continued broadband expansion.

"We are more committed than ever to using our broadband network for the consumer and commercial deployment of broadband services," Bell said. "With these deals firmly in place, we are primed to take advantage of each and every broadband opportunity that is presented."

C. Michael Armstrong, AT&T chairman, chief executive officer, and Excite@Home board member, said the deal is all about extending the reach and accelerating the availability of the Internet.

"Working together, Excite@Home and AT&T will bring high-speed Internet services to millions of homes and businesses and seize a great growth opportunity," Armstrong said.

Excite@Home must convert about 50 million of AT&T's Series A shares into Series B shares, each of which has 10 votes. As a result, AT&T will own approximately 25 percent of the economic interest in Excite@Home and 74 percent of the voting interest. Before the deal was done, AT&T held a 24 percent economic interest and 56 percent voting interest in Excite@Home operations.

The new governance and economic structure take effect in September, while the resolution of pending litigation between Excite@Home and Cablevision Systems Corp. , which lost operating control in Excite@Home, is settled out of court.

AT&T is free to begin consolidating Excite@Home into its financial results in September, rather than October as previously anticipated.

The Company's new board will consist of six members designated by AT&T, four independent members and one management representative. The Excite@Home board gave the boot to Cox Communication's David Woodrow, executive vice president of business development, Comcast's President Brian Roberts, and John Malone Liberty Media Group chairman.

Comcast and Cox reserve the right to opt out of the deal. But the stock penalties and financing required to produce competitive broadband Web destinations make the option unappealingComcast and Cox are relegated to client status for Excite@Home with a flexible stock option as a golden parachute for forfeiting its seats on the board of directors.

In addition to Bell and Armstrong the new Excite@Home board includes Mohan Gyani, AT&T Wireless Services President and chief executive officer; Will Hearst, general partner of Kleiner, Perkins, Caufield & Byers; Frank Ianna, AT&T Network Services president; Tom Jermoluk, Kleiner, Perkins partner; John Petrillo, AT&T executive vice president of corporate strategy & business development; Ted Rogers, Rogers Communications Inc. chief executive officer; Rick Roscitt, AT&T Business Services president; Dan Somers, AT&T Broadband president and chief executive officer, along with an eleventh member to be named soon.

What AT&T and Excite@Home executives are calling a "renewed commitment to its broadband cable business" is much more than an average operating agreement. Excite@Home is free to pursue additional content alliances to attract broadband eyeballs and enhance advertising revenues in ways that only America Online, Inc. and Time Warner, Inc. may rival.

The completion of the extensions, in conjunction with the newly assigned board, reflect a common belief among Excite@Home and its cable partners that growing subscribers on high-speed cable Internet services is a key objective over the coming years.

ISPs are free to negotiate last-mile delivery solutions with cable access providers and local or regional content providers in order to launch cable access. But independent service providers seeking to jump on the cable access bandwagon will have to wait two years for the exclusive aspects of the cable companies deals to expire.

In essence, the deal is designed to beat the combined forces of America Online and Time Warner to the cable access market. In the Internet industry, it is not a matter of survival of the fittest, but more a case of first-to-market, wins.

The real winner just may be consumer's seeking to take advantage of broadband access to the Internet over cable. They are eventually going to have their choice of providers, and choice tends to drive prices down while raising the quality of service.

Customer service and technical support remains a point of contention for hundreds of current Excite@Home users in the U.S. that have not received the quality of service they expected from the cable provider.

Texas-based customer and software developer Randy Dryburgh is experiencing the typical type of technical runaround from the wholesale cable service provider. As an AT&T@Home customer, when his Internet access goes down, so does his business.

"They have been out to fix my service 6 times in the last 3 months, and it still isn't fixed, I've been down now for 2 weeks and 2 days with no end in sight," Dryburgh said. "I get so tired to see these upbeat stories of corporate growth when it's clear the company has no intention of servicing their customers."

For the most part, Dryburgh has experienced service disruption since September. After a year's worth of complaints, he anxiously awaits digital subscriber line services to reach his home.

Meanwhile, a spokesperson for AT&T said the Dryburgh's claims are completely unfounded.

If Excite@Home and AT&T really wants to beat AOL-Time Warner, they will have to focus on providing an acceptable level of customer service to users, rather than lip service to technical support.

#If you have any other info about this subject , Please add it free.#

Your name: E-mail: Telphone: Your comments: If you have any other info about Thy Deal Be Done , Please add it free.