At the time the bankrupt Redwood City, Calif.-based broadband provider said adding new customers would put even more of a drain on its cash flow and make it hard to serve its existing customers.
But Tuesday ExciteAtHome says it has worked a deal with Comcast‘s
cable division to provision new high-speed Internet customers.
Financial conditions for the agreement were not released.
“Comcast and ExciteAtHome have reached an agreement that allows Comcast to continue deploying high-speed Internet services to our customers,” says Comcast Senior Vice President David Juliano. “Comcast is pleased that the two companies were able to reach this resolution quickly, without having any impact on new or existing customers.”
But why would Philadelphia-based Comcast want to spend money help a rival, especially one that analysts say the company could eventually buy at a discount?
Sources close to the deal say, Comcast, which is under contract with ExciteAtHome until the end of the year, has some customers of its own being served by the bankrupt broadband provider. The move also means that Comcast can help Excite’s largest investor, AT&T
appease creditors during the bankruptcy phase and continue to count on some semblance of income for itself.
The largest of those creditors is Promethean Asset Management, LLC. The New York-based investment firm sought to get back some or all of a $50 million secured loan it made to Excite on June 8.
But that was before Excite filed for Chapter 11 Bankruptcy and sold its broadband assets to AT&T for $307 million.
In between then, AT&T forced Comcast to enter into an agreement that also “restricts certain discussions between Comcast and third parties” without AT&T’s pre-approval. This latest arrangement obviously helped out both AT&T and Comcast.
It wasn’t too long ago that the Excite and Comcast were barely talking to each other. As recently as August 31, Comcast and Cox Communications
Now Comcast says it can add to its 8.4 million customer base and keep Excite alive in the process – perhaps for a future purchase.