A San Francisco judge ruled on Friday that bankrupt ISP Excite@Home could sever its distribution agreements with its cable company customers because the agreements are financially unfavourable to Excite. The cable companies were told that they must negotiate new agreements acceptable to Excite or risk the possibility that the service may be terminated.

The Excite broadband service is used by over four million broadband customers in the US, or 45% of the cable modem users in the country. The court case was opposed by the cable companies, including AT&T Broadband which has attempted a hostile takeover of Excite. The owners of Excite are hoping to find an alternative offer, arguing that AT&T’s offer is insufficient to repay its creditors.

On Saturday, AT&T Broadband’s 800,000 customers were disconnected from the web following the court’s ruling. However, according to the Washington Post, the company yesterday reached a deal with 12 other cable companies to keep the remaining network operational, at least for now. The companies will together pay Excite over $300 million to keep the network running for at least three months. A final agreement is due to be announced today.

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