The Chapter 11 club

Red Herring :: Metro ethernet providers were all the rage in 2000 and 2001, laughing their way to the bank as other communications services companies dropped like flies. Here comes the reality check. Falling bandwidth prices, too much competition, and a slow economy have taken their toll on several metro services companies. Sigma Networks was the first one to go dark. But much before Sigma stumbled, there were other so called metro carriers that tanked. One of the most high profile ones was Broadband Office, which was backed by uber venture capitalist, Vinod Khosla. The latest victim is Yipes Communications, a San Francisco company that filed for Chapter 11 bankruptcy protection last week. Wonder who is the next one to go – my bet is Telseon, but more on that later. Of course this is all part of the larger telecom meltdown, which we had written about in December 2000. Plus my take on the recent economic stimulus package and its impact on the telecom industry from the April issue of Red Herring