Metricom filed for bankruptcy
in July 2001 and shut down on August 8, 2001
. All 282 employees were laid off, and the company's assets, including patents and portions of radio spectrum
, were auctioned off on August 16, 2001
. Whether the new owner will revive Ricochet is yet to be seen, but it's doubtful.
The auction lasted just three hours. Among the bidders there was Verizon Wireless, but results of the auction won't be made public until Aug. 20.
Ricochet was launched in the San Francisco Bay Area in 1995, when most of the population had never heard of the Internet or the World Wide Web. It was a 28.8 Kbit/s service for $30 per month, and they had big plans to expand nationwide.
The problem is that Metricom started developing Ricochet in 1991, before standards such as the Web, HTML, and Java had emerged. So, like a lot of early-'90s technologies (remember General Magic?), Ricochet was proprietary. The network was based on Metricom's own transmitter/receiver boxes which no other company could build or use. To get coverage in a particular city, Metricom had to physically install these things on telephone poles all over the place. Expanding the network was a slow, tedious exercise, and no company but Metricom could work on it.
By 2001, Ricochet had garnered only 51,000 subscribers and Metricom had run out of cash, having spent more than $1 billion in a frantic effort to expand the network. The company had gotten spooked by the (supposedly) imminent arrival of cellular-based Web services -- the so-called 3G or 2.5G wireless -- and raised money for that expansion, spending it all in 1999 and 2000. Metricom went back to the markets to ask for more money.
The money didn't come for two reasons: The dot-com crash left investors wary of this kind of business, and the emergence of standards made Metricom's non-standard business plan look shaky.
As an aside, Metricom also spent money on an ad campaign too hip for its own good, featuring characters Rico and Chet. They were some kind of spies or something, doing spy-like things that no viewers understood, with no explanation of the product or its purpose. Pure New Economy advertising, and a pure waste of cash. Too bad, because Metricom was no dot-com flash-in-the-pan; they had a real product that I'm told worked very well.