Metricom to Auction Assets

Without an investor, Ricochet service must be suspended, hurting companies such as Compaq

Unable to find anyone to invest enough into the company to save it, Metricom Inc. announced that it will suspend its Ricochet wireless Internet service and that it plans to auction off its assets this week.

The assets include all patents for the Ricochet MCDN (MicroCellular Data Network) as well as the radio spectrum upon which the service runs.

The San Jose, Calif., company was a pioneer in the wireless industry—the first to offer 128K-bps wireless Internet service for notebook computers. But competing high-speed data networks and a gloomy economic climate have made it hard for the company to gain financial backing.

Metricom filed for bankruptcy July 6, revealing a debt of several hundred million dollars. (Investors had included WorldCom Inc. and Microsoft Corp. co-founder Paul Allen.)

At that point, Metricom officials said the company would continue offering its service in the 15 cities it reaches, including Atlanta, Baltimore, Chicago, Los Angeles and New York. But now officials say service will be shut down indefinitely, depending on what happens after the auction.

This is tough news for licensees of the technology, including Compaq Computer Corp., which began offering Ricochet service for its iPaq devices in April. "This is definitely a disappointment," said Brant Jones, manager of product marketing in the iPaq Mobility Solutions Group at Compaq in Houston. "We really liked this technology a lot, and our customers were happy with it."

"Were notifying our customers and giving them a variety of options," Jones said. "Obviously well cancel their contracts." Other options include the slower CDPD (Cellular Digital Packet Data) service that Compaq already offered before signing on to Ricochet. Ricochet was added because customers had wanted something faster than CDPD, he said.

"Next-generation" GPRS (General Packet Radio Service) wireless service is expected by early next year.

The company will be introducing an expansion pack for iPaq devices that supports GPRS.

Although Metricom had been warning for months that service would shut down if a big investor didnt come along, Compaq officials said they were genuinely surprised that it shut down so soon. "What we were really trying to do was keep them afloat by doing some sales," Jones said. "We really didnt expect the service would stop so quickly."

"Our partner in this deal was WorldCom," he added. "And we had every assurance from WorldCom that things would go smoothly."

Wireless Internet service provider GoAmerica Communications Corp., which offered services on the Ricochet network, plans to shift to other, lower-speed services after Ricochet shuts down. Customers who want to cancel their plans entirely will not be charged, officials said.

Nothing remains of Metricoms Web site, save a terse explanation of the shutdown, the auction and directions for subscribers to retrieve their e-mail through Aug. 21. Users are advised to "connect to the Internet by whatever means you have available," then configure their Post Office Protocol mail server setting to