Leading cable broadband provider [email protected] in late April tapped Sprint veteran Patti S. Hart to serve as chairman and chief executive
officer — charging her with executing on the company’s renewed focus on its
broadband franchise and scaling back its media operations. After a little
more than a month sizing up @Home and staying out of the spotlight, Hart
appears to be moving into the trenches, ready to wrestle the company back on
The company Tuesday announced that it is in talks with Comcast Corp. and Cox
Communications Inc. — which together hold about 15 percent of [email protected]’s
equity — about restructuring its commercial agreements.
The March 28, 2000 letter of agreement between @Home and the two companies
allows them to provide six months notice of intent to terminate exclusivity
obligations or their entire relationships with [email protected] on June 4 and
December 4, respectively. @Home said it has extended the deadline for Cox
and Comcast to decide about giving notice of termination of the exclusivity
provisions until June 18.
According to Matthew Harrigan, senior research analyst with Janco Partners,
Hart has likely recognized that the creation of the AOL Time Warner behemoth
(and the open access requirements placed upon it as conditions of approval)
means the end of exclusivity agreements and a new era of open access deals.
“There aren’t going to be any exclusive deals going forward,” he said.
Harrigan said the talks will likely spell out whether the exclusivity
agreements will extend into next year or if the termination of the
agreements will be accelerated to Dec. 4.
That doesn’t mean Comcast and Cox won’t be working closely with @Home.
“The new contracts should solidify the long-term relationships with Cox and
Comcast,” Harrigan said. “I think that everyone here has ample incentives to
maintain the relationships.”
That’s because @Home has a large first-mover advantage, with four years of
experience in the space. While open access is likely to create a number of
issues — billing and customer service head up the list — the network
itself has already largely been built-out. And, Harrigan said, the current
splits of the retail revenue — about 65 percent/35 percent — are fairly
favorable to the cable multiple systems operators (MSOs).
“This is really a non-replicable network at this point,” Harrigan said.
“It’s really too late in the game to create such a large network without
having a lot of growing pains.”
So Hart may have stayed largely silent for the past month, but Harrigan said
it is likely that she simply wants to solidify the MSO position before going
on the offensive.
“I think clearly they’re trying to get some things done very quickly to
stabilize their position,” Harrigan said. “I think she’s waiting until she
has some concrete announcements to make and everything has firmed up a
Meanwhile, Hart has been working on @Home’s executive structure. In April,
then Chairman and CEO George Bell announced that the company would re-focus on its core broadband franchise
and pare away deadweight media properties that didn’t have a direct
relationship with that core business. But it was Bell himself that led @Home
into the media business. He oversaw the merger with Excite. Hart on the
other hand — former president and chief operating officer of Sprint Corp.’s
Long Distance Division and most recently chairman, president and CEO of
Silicon Valley-based DSL provider Telocity Inc. — is telecom to the core.
Proving that point, Hart Tuesday brought in fellow Sprint alumnus Matt
Jones, most recently president and CEO of real-time VoIP provider Lipstream
Networks, to take over [email protected]’s newly created COO position.
“Matt’s appointment signals that we are serious about operational excellence
at [email protected],” Hart said. “I worked closely with Matt at Sprint and I am
confident in his ability to deliver results. He brings a wealth of skills in
developing strategies, managing partnerships, and delivering bottom line
results as a general manager. Matt also understands thoroughly how to manage
and run a networking company from his years of experience in the industry.”
At Sprint, Jones served as Long Distance Division chief of staff, with
responsibilities for strategic planning, business development, alliance and
partnership management and public relations. Prior to that he was vice
president of national sales for Sprint PCS. He has also served as senior
vice president of Sprint Canada and began his career at AT&T.
“[email protected] has amassed the largest portfolio of broadband assets in a way
that gives it a strong and unique position in its space,” Jones said. “I
joined the company because the potential for broadband services is enormous
and yet it has just barely been tapped. In my role as chief operating
officer for the company, I will look for ways to capitalize on [email protected]’s
leadership position in the broadband services market and to deliver
consistent, tangible results that provide value for the shareholders and the
Jones will immediately take the reins of the @Home, @Work and Matchlogic
But while Jones is on the way in, two executive vice presidents are on the
way out. The company said Tuesday that Byron Smith, executive vice president
of the Excite Network, and Mark O’Leary, executive vice president of
Broadband Services, have resigned and will leave the company in July.