It's been clear for months that relations between Cablevision Systems and Excite@Home were crumbling, but only now have the companies acknowledged how bad it's been.
Despite its partnership with Excite@Home, Cablevision Systems has tied just 10% of its high-speed data customers to the online service, instead steering customers to its own proprietary Web service.
That's the charge Excite@Home makes in a countersuit filed as part of a separate ownership dispute with Cablevision. While the MSO has rolled out high-speed Internet service to 65,000 subscribers, just 6,700 of them are hooked up to Excite@Home. The rest are tied in to Cablevision's home-grown Optimum Online service.
Cablevision is giving Excite@Home meager distribution despite receiving warrants for 21.9 million of the company's shares at just 25 cents each. At one point when the high-speed Internet service's stock was soaring, those warrants were worth $1.8 billion. Today, they're worth $400 million. Cablevision President James Dolan has publicly criticized Excite@Home service.
The two companies' agreement temporarily "carved" out some of Cablevision's Long Island and Connecticut systems to stay on Optimum Online. But the Internet company contended Cablevision is going well beyond those exclusions.
Cablevision said that "Excite @Home's counter-claims are a transparent attempt to deflect attention away from its breach of Cablevision's rights as a party to the stockholders' agreement." Cablevision has sued Excite @Home over AT & T's planned deal to secure control of the company in exchange for granting MSO investors Comcast and Cox the option to sell their shares at a fixed price of $48, 150% more than the current price.