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By Julian Goldsmith, 4 December 2001 08:30

NEWS AT&T is expected to drop its bid for the rest of Excite@Home, after three of the cable companies the ISP currently deals with agreed to ensure access for more than 1.7 million subscribers in the short term. AT&T's $307m bid is considered far too small by Excite's bondholders, who said the company's 4.1 million broadband subscribers are worth at least $1bn, according to US reports. But since the company was declared bankrupt on 1 October, AT&T has been the only bidder for the business. On Friday, Excite@Home was granted the right by a bankruptcy court to renegotiate its existing contracts with the cable operators which fronted its subscribers, prompting speculation that these operators would migrate their customers to their own networks. So far, only AT&T has done so, and now Comcast, Cox and Rogers Cable have made transitional agreements in which they will guarantee Excite with revenue and subscribers, for the next three months, while they go through the process of migrating over 1.7 million of their subscribers back to their own networks. The deal will stave off the inevitable close of Excite@home for another quarter, but it cast doubt over any chance of the company coming out alive. In the last week, Excite has lost around half of its 4.1 million subscribers to independent cable networks.