AT&T, [email protected] Join Networks For Web Access

Promising a smooth ride for rich-media content providers, AT&T Corp. and [email protected] Wednesday raised the curtain on plans to jointly market, provision and maintain IP service on both networks.

Financial terms were not released for the deal that gives AT&T reseller rights to @Home’s network, selling customers seamless IP interconnection between AT&T’s OC-192 and @Home’s OC-48 backbones.

According to an @Home official, specific dollar amounts won’t be released but the deal doesn’t involve a one-time payment by AT&T, but a continuing agreement where the phone company pays @Home on a per-customer-garnered basis.

Mike Jenner, AT&T Internet connectivity services vice president and general manager, said the partnership gives content providers what they need; dedicated service on a high-speed network.

“With the ability to simultaneously connect to both the AT&T and [email protected] backbones, customers now have the added confidence that their online events will run without a hitch,” Jenner said.

It’s a partnership ideally suited to both companies: AT&T now has access, for its content customers, to @Home’s nearly three million broadband subscribers, while @Home gets a much larger footprint for its IP services.

But the deal puts responsibility for billing and customer care completely in the hands of AT&T, essentially handing control of @Home’s IP network to the number one cable TV provider in the nation. Both companies will take ownership of customer provisioning.

Officials said @Home is expected to send all Web hosting and facilities-based referrals to AT&T data centers.

AT&T is a significant @Home shareholder, with C. Michael Armstrong, AT&T chief executive officer, and John Petrillo, executive vice president for corporate strategy and business development, sitting as board members.

But according to @Home spokesperson Stephanie Xavier, both companies retain complete autonomy and leverage the strengths inherent in both.

“AT&T sits on our board of directors and they do have an approximately 40 percent interest in the company, but they don’t control our day-to-day operations,” Xavier said. “This announcement is an initiative between two companies that leverage each company’s assets and is targeted at a high-growth industry.”

Mark O’Leary, @Home executive vice president of broadband services, said the deal brings together everything a broadband content provider might need, from Web hosting facilities to a dedicated backbone connection.

“With our multi-backbone strategy, we plan to offer the industry’s highest quality delivery system for rich media, which experts say is already reaching one-third of all U.S. Web audiences,” O’Leary said. “We expect that our initiative can result in significant improvements in the streaming media experience for broadband users.”

At press time, shares of @Home gained 65 cents to $5.90 per share this morning on the news, while AT&T dropped 32 cents to $22.48 per share.

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