Following a string of layoff announcements, Metricom, the provider of high-speed Ricochet wireless Internet service, voluntarily filed for reorganization under Chapter 11 bankruptcy protection, but still plans to keep its 41,000 subscribers on-line.

The California-based company says the petition allows it to restructure its operations and debt obligations while maintaining the operations of its wireless network, and continuing to provide services and access to many resellers, channel partners, and directs customers. Even with backing from the likes of Microsoft co-founder Paul Allen and WorldCom, Metricom’s problems became acute in May when it announced it needed $500-million in cash to keep operating. Obviously, its call for help went unnoticed.

According to Interim CEO Ralph C. Derrickson, the company was forced to seek bankruptcy protection "as a result of the depressed state of the capital markets." He added, "Consequently, management and the Board of Directors decided this action would be in the best interest of all Merticom stakeholders."

Despite the odds, Derrickson remains optimistic: "Although there are certainly many challenges ahead, we believe that the prospects for our outstanding technology remain strong. We will continue to work hard to preserve the value inherent in our technology, while evaluating the options before us."

Some industry observers are saying that even though Metricom's concept of high-speed wireless Internet service for a flat rate makes sense, perhaps, it was too much too soon, especially when it comes with a billion-dollar price tag.

For more information: http://www.metricom.com/news_events/media_center/