This story was written by Keith Dawson for the Industry Standard's Media Grok email newsletter. It is archived here for informational purposes only because The Standard's site is no more. This material is Copyright 1999-2001 by Standard Media.

Wireless Pioneer Circles the Wagons

Jul 03 2001 08:06 AM PDT

Metricom files for bankruptcy protection when its service turns out to be expensive for consumers and for the company.

A pioneering wireless Internet access company went Chapter 11 yesterday. Metricom's bankruptcy filing was well covered in the national tech press, but Grok looked in vain for a local angle in the cities where the company offers wireless IP tone.

Metricom introduced its Ricochet service in 1995 and has rolled it out in 15 cities (plus a number of airports). Thirteen of the cities receive 128 Kbits/sec service. But Ricochet has only 40,900 subscribers, according to both Reuters and the AP, and the base has been slow to upgrade from Metricom's original 28.8 Kbits/sec service. The faster speed comes at a steep price, which several outlets reported as $75 to $80 per month; the AP said $69.95. The modems cost $100 to $300.

InternetNews provided a good wrap of what has become a familiar story. Metricom laid off 22 percent of its staff in March and a further 23 percent last month. After big investments by Paul Allen and WorldCom, the company couldn't find the capital it needed to continue expanding. Metricom will continue to offer service while it tries to restructure its debts. A number of outlets mentioned the title Metricom has dreamed up for the guy who will see it through Chapter 11 - "chief restructuting officer."

CNET's Ben Charny looked to mobile/wireless consultant Alan Reiter for insight on Metricom's problems. "The concept makes a lot of sense," CNET quoted Reiter, but "it costs a billion dollars to create a nationwide network." Charny summarized the lesson in Metricom's filing this way: "Although wireless Internet access was hyped as a major growth area just a year ago, consumers have shown little demand for such services." -

Metricom Files Chapter 11

Metricom Seeks Chapter 11

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Wireless Internet Firm Metricom Files for Chapter 11 Protection
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Metricom Announces Another Round of Job Cuts in Effort to Conserve Cash
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