To witness the merciless effects of today’s bear market, one should look no further than Broadband2Wireless Inc., an unlicensed wireless broadband provider in the Boston area that filed for Chapter 7 bankruptcy just two months after launching service.
The company hoped to capitalize on the failure of digital subscriber line and cable broadband providers in Boston and other cities, but instead found itself plagued by financial loss and lacking the customers and investment capital needed to keep the business operational.
Representatives of BB2W could not be reached for comment, but documents filed at the U.S. Bankruptcy Court for the District of Massachusetts June 12, said Paul E. Saperstein Co., an auctioneer, had been approved to liquidate all the company’s assets, including its still-operational network serving about 100 customers in Boston.
BB2W launched its Airora service April 16 using the 2.4 GHz and 5.8 GHz frequency bands. In addition to the Boston network, plans were in the works to deploy service in south Florida, New York and Los Angeles.
Paul Adams, co-founder and chief executive officer of BB2W, told RCR Wireless News in April that Airora was unique because it could be provisioned in less than a day, a feat enabled by the core of BB2W’s technology-a back-office operations support system, designed and implemented in cooperation with PricewaterhouseCoopers.
The prequalification system allowed prospective customers and network service provider partners to determine Airora’s availability in a given area, sign up customers for service and view and manage accounts, all via the Web.
“We’re really trying to perfect the process and perfect the network,” said Adams in April. “We spent a lot of time and money on building the prequalification tool.”
Apparently the undisclosed amount BB2W spent on the back-office support system, as well as the $7.3 million it spent on building a network of data centers and 18 rooftop sites in Boston, and on equipment for future deployments in several other cities, was not enough to attract users and investors.
The company reported $12 million in losses from February of last year to June 5 of this year. In February BB2W raised $32 million in its first round of funding from six investors, including Credit Suisse First Boston.
Peter Jarich, director of broadband research for The Strategis Group, speculated BB2W put its cart before the horse.
“Their plan, from the beginning, was highly optimistic, using standard off-the-shelf BreezeCom gear. For his part, Paul Adams sold a great story … and they definitely knew what it took from a customer standpoint,” Jarich said.
But BB2W didn’t have the technology to make its ambitious plans work, said Jarich, noting the kind of service the company was trying to sell was not viable with the equipment it chose to work with. This was not necessarily a dysfunction of the equipment, because the equipment BB2W used was not designed or marketed to support BB2W’s service expectations.
Airora was capable of supporting data rates up to 1.5 Megabits per seconds and cost $50 per month with unlimited use. The equipment cost $99 contingent on a one-year commitment. If the customer chose a month-by-month subscription, the one-time equipment cost was $249.