Company deathwatch - dslreports.com

A quick reference on the troubled state of the ISP/CLEC market.. if you have news you think should be added here, please submit it, confidentiality guaranteed.

Updates (June 29th)
BlueStar, Capu.Net

Updates:
Mpower, InternetConnect

Updates:
PathNet, CAIS, Rhythms

Updates:
Onvoy, DSLNetworks, IBS Networks

DSL Specialist ISPs/CLECs in Chapter 11 or closing

Bluestar - After being bought by Covad at end of 2000, now liquidated along with all COs.. (29/07)

Reflex communications - End of March - suddenly closed and shutdown. Building managers signed up forced to seek alternatives, leaving customers stuck without many options.

IBS Networks - Filed for Chapter 11.. posted notice on their site.

connectsouth - funding has run out, closing over the last week of Feb. 3000 customers many ex bluestar lose their lines.

Savvis - 46% Owned by Bridge Information systems, and Bridge is its biggest customer. Unfortunately, Bridge is in bankruptcy proceedings. (Feb 7th)

Darwin Networks - After getting 91 million in funding last year, backed by Cisco as well, they went chapter 11 in January 2001 after a drastic staff cutback in December 2000. Story was in Louisville Courier Journal on Jan 12th. (Feb 7th)

Vitts - ran out of funding, now in Chapter 11, causing another loss of SDSL options in the north east.

JATO - after a re-focus to south-west and south central area, are now shutdown entirely, leaving their customers to find another provider.

Maverix.net - closing down, due to funding being pulled.

Picus communications - in Chapter 11

Relaypoint - now in Chapter 11

ICQ Communications - now in Chapter 11, delisted from NASDAQ.

Zyan - in Chapter 11 press release. Also See our article on the "Zyan Mess", and how Zyan resellers and customers are caught.

Flashcom - in Chapter 11. Rhythms residential lines go to Earthlink. NorthPoint residential lines go to Telocity. Business lines beng moved to XO communications. Website functionality reduced to nothing.

Fastpointcom.com - in Chapter 11 (although their website gives no hint of this) .. Covad obtained control of covad lines to switch to other ISPs.

Digital Broadband Communications - lays off 85% of its staff. Now in Chapter 11 (news article here) 12/27

Bazillion - Bazillion are no longer selling DSL, and have redirected customers to Speakeasy. (12.22). No published plans yet for existing customers (12.26). Bazillion subscribers told game over. Bazillion closes (01.12).

PSN - Lost its relationship with CLECs and customers are being told to switch, then PSN died completely.

Vectris - update: Shutting down and shedding most staff in Austin by Dec 15th as the search for funding fails. Filed chapter 11 in January.

DSL specialist ISPs closing with limited fuss, or changing business focus

Onvoy - handing all DSL customers to Earthlink.. (by march 10th).

Exario - has sold its DSL lines and customers to DSL.net, to concentrate on the business VPN market (like InternetConnect). (03/01). recently received new funding for its new focus.

Phoenix - business lines acquired by Megapath. Residential lines shifting to Telocity.

DSL Specialist ISPs in trouble or cutting back

CapuNet - Layoffs to reduce costs in the face of investors going cold on the whole sector. (03/01)
Exit residential business entirely - handed to Earthlink (29/07)

SpeeDSL - LMKI tried to pull the plug on what they claimed is a "non-paying reseller", however SpeeDSL got a restraining order against LMKI to force them to continue service at least for the interim.

InternetConnect - laid off 19% of staff.. to concentrate on the business VPN market.
The top management of InternetConnect are ex-Nextel, (a company embroiled in a huge race discrimination suit), the rest are ex ISP Channel, which has basically collapsed recently.(12/19)
InternetConnect layoff a bunch more people, reportedly, 60 (in April) then 30 more (in May). Rumors are that the VCs are unhappy about Covad-only reliance.

Internet express - (NOT netexpress.net of Moline IL - that is a different company). Covad Safety net is offering to electronically switch Covad Internet Express customers to "Covad Direct" at the customers request as long as the customer agrees that they may be breaking contract with the ISP if they do so. Covad/NorthPoint have evidently cut their relationship with this ISP.
Frustration for customers as Covad.net provides little details on new prices (they are not going to be the same) or contract details. (12/26)

BigNet - In the same boat as Internet Express! .. Covad Saftey Net is quite willing to switch any customers to Covad Direct if they absolve Covad of any legal tangle they will get into with BigNet by doing so.

DSL Networks - DSL Networks has laid off 50% of staff and closed down all offices except for San Fran head office. Lost ability to provide or sell Covad and NorthPoint lines, Covad shut them off in Febuary, stranding customers. NorthPoint shutting them off repeatedly (March news).

winfire/freedsl - split into three groups now. Uncertainty over whether they can continue. note here.

Facilities based (CLEC) ISPs in trouble

PathNet - filed for Chapter 11, April 2th. story here.

HarvardNet - In a surprise move, giving up DSL entirely See story in Boston Herald, and the FC thread located here, plus this news release.

Red - (aka Red Connect) closed down a while ago, but now is the time the customer lines get turned off. And turn off they did.

NorthPoint - Now in Chapter 11. see article. Network broken up and closed down completely at end of March..

Covad - Out of Chapter 11 - but not out of the financial woods completely yet..

Rhythms - Cost reductions info here. More news: April 2nd sees NASDAQ delisting threat and outside help to explore strategic options.

Network Access Solutions - SBC has got deeper into some kind of complex deal with NAS that involves SBC selling NAS lines in Verizon areas and NAS giving up its facilities in the west info here. Prior to this, NAS had cost reduction projects and layoffs. Stock in same bog as Rhythms and NorthPoint, below a buck, on funding concerns.

MPOWER Communications - Now closing offices and laying off staff. Future uncertain.. cut back 275 staff on May 25th and is reducing footprint.

Surviving DSL Specialist ISPs

SPEAKEASY - claim to be comfortable with their cash burn and cash reserves for 2001, hope to expand faster.

Megapath - claim to be comfortable with their cash burn and cash reserves, hope to expand (business lines) faster. NorthPoint lines redirected to Rhythms. Now has relationship with Telocity to pass pure residential customers.

National ISPs not depending only on broadband

XO Comminications - also putting tempory stop to NorthPoint orders and redirecting them to others.

Earthlink - lost $80m last quarter, but with considerable cash reserves, supported by their narrowband and webhosting business. Broadband still a small fraction of their overall revenue, but growing.

Sprint - who knows, their products even compete with one another, but they'll continue tweaking their ION and wireless products for the forseeable future.

AT&T Broadband - Despite difficulties at AT&T, they are a huge company and are well positioned to advertise their DSL options as "reliable".

uu.net - another huge company with only minority DSL business via Covad. Offering an incredible 6 months free on business DSL lines with long contracts.

Prodigy - Undergoing management turmoil under the uncertain hand of SBC. Needs constant cash from them to keep operating.

Telocity - update: Telocity made it .. bought by Hughes (DirecTV).
With 23-30 thousand subscribers now, picking up more from distressed ISPs, lost a stunning $38m last quarter on operations, and have $70m or so in cash reserves.

Publically listed DSL specialist ISPs with low stock prices

LMKI - Changed its name and was effectively bought out by a new management team. Now known as Myrient Inc.

CAIS - Loses piles of money, but got a lifeline from their preferred hardware supplier CISCO who made a timely purchase of ISP related software from them. April 3rd - staff layoffs of 17%..

others

Your friendy local ISP - probably doing ok. DSL was something the smaller local ISPs needed to offer, but they were not betting the farm on it, so life for them continues although they are probably keen to sell you web hosting, DNS, and web development services and consulting, and they absolutely want the small business customer above all else!

Any DSL specialist ISP - Basic DSL is not profitable at current market prices, business plans require that value-added services (that are mostly or purely profit) be sold as well. DSL ISPs who are not currently funded to the completion of their business plans will have difficulty when the expansion cash runs out. Even those that are funded will have to execute perfectly to survive.

All the Telcos - doing just fine, thanks very much!

ISPchannel - (cable provider) shutting down its cable network entirely.

An example of Covad's message to locked up subscribers:
FastPoint Communications is now the subject of federal bankruptcy court proceedings. At this time, Covad's policy towards ISPs in bankruptcy is to not switch their customers to other ISPs without the approval of the bankruptcy court or the written consent of the ISP itself. Upon approval, Covad can offer a convenient DSL service transfer option that will require no additional up-front fees.

Please check back soon by visiting this site for further details. Covad wishes to continue service to customers of financially distressed ISPs and is actively working towards solutions that will enable it to do so. We appreciate your patience.
An example of Covad's message to subscribers on ISPs that Covad is not happy with:
Customer Acknowledgement Required
Whether and to what extent you have contractual obligations to your Current ISP is a matter between you and your current ISP. If you have such obligations, Covad cannot relieve you of them.

Pythrios

@66.150.x.x

The Covad takeover of InternetConnect

I never did like sad endings.

With Covad Communications' acquisition of InternetConnect practically complete,
I am saddened by the end of a company that felt like an ex-wife to me. As many
days as I had, frustrated to tears at the standards and practices there, both
as an employee and a customer, I loved the people there. I believed in their
products. I enjoyed working for their founder and President and it was with
mixed feelings that I left because I did have my own career to take into
consideration. I did see doom on the horizon. However, that didn't make it
any less painful to leave the company with the red billboards coast to coast.
The company that gave me a chance to become the IT professional that I am
today. The many, many familiar faces. The fact that I even fell in love with
one of the directors. The love-hate feelings I had while working there left me
feeling like a divorced husband.

I worked there for two years, to the day and was hired when they occupied the
Northeast corner suite on the 20th floor of the Wilshire tower where the
company got its start. Before our takeover of the two adjacent suites, before
the move to GeoCities' old headquarters in Marina del Rey, prior to the move to
the Epson Printer building across the street from the Torrance Police
Department. When there was a sales man and his manager, two guys in technical
support, a single person handling billing, customer service, and collections,
and, my old-school, network engineer boss (for six months) was a cantankerous
voice on the speakerphone. The data center was an 85 degree back office with
desktop towers underneath and on top of utility tables, between which, two
telco racks that housed routers and the Redback switch to be the origin of the
company's premier product, DSL.

The situation between a start-up and its employee is somewhat of an
embarrassing agreement. This is especially so if you are a tech. It's the
understanding that the employee probably doesn't have the experience, let alone
the college degree or even a diploma to work at a long-standing, reputable IT
firm--but, that employee wants to learn. It is also the understanding that the
start-up firm probably doesn't have the money for a more experienced or
educated tech. Not unless, of course that high-end IT person is led to believe
the company will end up big some day and they've been promised a high level
position from the start like CTO, Director of IT, etc.

So, both parties are in the precarious situation of evaluating two things; the
employer needs to trust that just because he or she is new doesn't mean they're
unqualified. So, they have to look at things like ambition, history, and what
they're doing. Sometimes they have to go through a bunch of bad apples before
they find one who is interested in helping the company grow. While on the
other hand, an employee might put in long hours for below-industry standard pay
that they, albeit, agreed to given the fact they can't command major IT
salaries for whatever reason. However, they could also be the victims of many
circumstances. For example, incompetent people could run the company so
they eventually go out of business and your effort is for naught.

That's what happened to many during the dot-com collapse era. In many ways,
however, InternetConnect was not just another dot-com, for better or for worse.
One of the ways is that employees hired before they left Wilshire hit a glass
ceiling due to many factors. The main factor was that, in the interest of
attracting investors, we inherited foreign upper-level management from Nextel's
southwest operations upon moving to Marina del Rey. At this time, we had
everything from a new CEO to VPs of Customer Operations and Sales with an
injection of customer service representatives to become the new Installation
Coordination department.

This was good news in the way of bringing order to our chaotic operations.
This, however, stunted the growth of employees that deserved promotion because
of their determination to do a good job in the face of what appeared to be a
never-ending trial of phone problems, angry customers, and shrinking
office-space. Everybody who didn't quit before the move to Marina del Rey went
through hell, and came back for more--even on weekends.

While debuting the DSL product, I became the sole member of the technical
support department because one of the three men in the department quit at the
beginning of 1999 and my partner went onto create what would become the
Provisioning Department. Provisioning, at the time, operated in the same
capacity as the Installation Coordination department to come later that year.
The CTO hired two directors and one manager from a telco company where he used
to work. The idea was to bring sanity to the technical operation of the
company. One of those three ended up being my boss and, eventually, I did get
help. A total of four employees were hired to join me as technical support
representatives.

Somehow, my position ended up directly on top of the fault line of an issue that
proved to be the nagging tooth ache in the would-be DSL giant. Webhosting.
DSL eventually got streamlined into a logical process: the sales department
took the order, installation coordination worked with our partners and the
customer until the service was completed, provisioning would create the
service, billing would bill it and technical support would support it. (Henry
Ford's ingenious assembly-line process in action.)

Not webhosting.

The order, coordination with the customer and our partner (Network Solutions in
this case), the creation of the service _AND_ the support of that product
through incoming phone calls, e-mail and trouble tickets rested in the hands of
my department.

I was the only person in that department, the webhosting department, from about
April 1999 until about late October when my boss hired a temp to help with the
non-technical aspect of my duties that reduced the number of suicidal thoughts
I had (just kidding). It really was that bad, though. Once, I caught the flu
in October of that year and nobody noticed that orders for websites and their
e-mail addresses were piling up for three weeks. Customers were livid and our
sales people were so infuriated by this that, I think, if it weren't for a
programmer there at the time, one of our sales guys was going to take me out
back and deck me. Finally, I get that temp.

Despite my warnings, management was constantly waiting until circumstances
reached a critical condition before conceiving and implementing solutions.

Long after we'd hired the temp. permanently and two others, plus a transfer
from technical support department and then hired two more temps, eventually
permanently--we finally did something right... Almost.

There was an attempt to integrate webhosting into the provisioning department
and push off the jobs of taking the order, coordinating it, and supporting it
to the same departments that did the same things for our DSL service. However,
this failed when both installation coordination and technical support engaged
in passive resistance, essentially refusing to learn the process. The excuse
was that they "don't know this webhosting stuff" which flies in the face of the
fact that almost all of them used to be cell phone customer support people
before coming over here to start working something they didn't know:
high-capacity leased lines. However, the blame lies with the other fact that
executives elected to roll over on the issue. Instead of saying, "You learned
DSL, you'll learn webhosting," me and my tiny band of stooges were back to being
a smaller, duplicate copy of the rest of the company, minus systems
administration, marketing, sales and billing.

Installation coordination received folders containing an order form for DSL and
another one for webhosting but for some reason, the webhosting forms were being
lost, lying on someone's desk unprocessed, etc.

Technical support would receive telephone calls for webhosting issues but the
standard practice was to issue a trouble ticket with little or no information
other than a statement with the equivalent of "customer is pissed, call soon."

Instead of training these two departments, the responsibilities were just
shifted back to us.

The end result was that issues were routinely escalated to top brass. This
caused the heat of a spotlight to come down my tiny gang because it looked like
we were falling down on the job from the hundreds of tickets pending.

It goes against my nature as a tech. to receive a request to resolve an issue
and ignore it while promising the customer the problem will be corrected.
However, that is what I was asked to do to more quickly close trouble tickets.
Half the time, the issue concerned a matter of our back-end infrastructure and
getting an answer ou

In due time....

Re: In due time....

Re: In due time....

Re: In due time....

Re: In due time....

Re: In due time....

Telocity?

Re: Telocity?

Re: Telocity?

Re: Telocity?

Re: Telocity?

Whats the Local ISP to do?

Re: Whats the Local ISP to do?

What the experts predict??

Re: What the experts predict??

AT&T Phone over Cable

Re: AT&T Phone over Cable

Re: What the experts predict??

Some More...? + notes

Re: Some More...? + notes

Re: Some More...? + notes

And the Anti-Inexperienced ISP...?

and PSN?

Re: and PSN?

Re: and PSN?

Re: and PSN? TELOCITY & NORTHPOINT CONTACTED ME

Prodigy?

What about Bazillion?

Re: What about Bazillion?

Re: What about Bazillion?

Re: What about Bazillion?

OOUCH.....

It's a damn Shame

Re: It's a damn Shame

Re: It's a damn Shame

Internet Express? Damn!!!

@Link?

@Link? Yes!

Need to add a new field to the isp reviews.

RE: Where's that Smoke Coming From

Dead deathwatch?!?

The Covad takeover of InternetConnect