No. of Recommendations: 5
Today was a sad awful day for wireless internet. In court today, in San Jose, a truly marvelous technology and wireless internet system was
decided to be scrapped and liquidated. Bleah.

Let me tell you something about wireless internet. I'm talking about Ricochet, the service developed by Metricom. I own a Sprint PCS compatible
Star Tac phone that has "internet capability" and it is truly horrible. 5 lines of text only, awful keyboard, etc, but I already posted about that. That
phone is close to the state of the art as far as the mass audience has been made aware of for wireless internet.

I also own a Ricochet modem. This service runs at 128kbps speed, at least (128k was it's rated speed, but it often got much faster). This is real
Internet, at speeds twice as fast as dialup modems, wireless, and mobile. Mobile as in it works from BART trains running at 70 mph. And at a flat
fee per month too .. no worries about stupid things like how many minutes are in your plan, etc. Just use it as much as you like, no problem. They
also had plans for the next three generations of Richochet service which would have taken it to 256kb, then 512 kbps, then over 1 mbps, all within
about 3-5 years, during which time the 3G camp might have barely begun to get their service running.

In one form the Ricochet modems are capable of hooking to PDA's that have PCMCIA slots and run Win CE (the HP Jornada 7xx series is one
such). So it was highly possible to have a highly mobile device with awesome internet connectivity. The modem I have, though, is an external unit
that connects with the USB port and you were expected to velcro it to your laptop computer. I saw a picture of this device once velcro'd to the back
of a Compaq iPAQ PDA that was pretty hilarious - the modem was slightly larger than the iPAQ.

What could you do? What services were useful in this form factor and speed?

Well, the most useful for me was ... if I wanted to see what traffic was like to pick the route home, just go to the San
Jose page for and look at the latest report. This use is too high a bandwidth requirement for the current wap phones, but was just
fine for Ricochet. I also liked to sit in restaurents and do email etc.

I also could use VPN capabilities to get into my companies internal network, and interact with stuff inside the company at decently good speeds. I
do work remotely a lot.

So what happened ...?

A few things. Earlier this month the company filed for chapter 11 bankruptcy protection. For months the company had been warning it was
running low on money and might go out of business. It was, though, a surprise for them to file for bankruptcy since all the announcements by the
company leadership had been implying that further funding was imminent.

See ... they had an ambitious plan. They wanted to cover 46 U.S. cities with the network and have it all built out by the end of 2001. They got
sufficient funding from Paul Allen (Vulcan Ventures) and Worldcom to cover about half of the network buildout. BTW, that funding was $600
million, to cover half the network ... how much are the 3G guys spending on spectrum licensing alone???!? But it was known all along that further
funding would be required to finish the deal. At the time I bought into the company I thought it would be fine, but that was before all this mess the
past year or so with total decline in business.

The story gets a little fuzzy on some points. Worldcom was expected, and kept claiming they would be doing so, selling the Ricochet service
through a 2,000 person sales force. Since Worldcom has excellent access to business customers it seemed like a slam dunk to get lots of
subscribers. Never happened ... and we learned in court proceedings during the last two weeks that Worldcom stopped selling Ricochet last
December, and had sold a total of 5,000 subscribers. Not at all what they'd promised to do.

There's more ... so many ways of looking at the events and reading between the lines. What did they mean when they said that funding
negotiations were ongoing, and they couldn't talk about them? Or, there were limitations in place involved with the funding by VV and WCOM that
gave those investors the right to reject any further funding by third parties .. which surely would've made it hard for MCOM to get independant
funding. And then to have WCOM totally ignoring their responsibilities as a Ricochet reseller, not to mention their $300 million investment, is
ludicrous. You have to wonder what game WCOM was playing.

In any case .. a huge share of the problem lies in the ambitious buildout plan, and the absolute purchase gurantees built into the contracts with
suppliers. Turns out that, even when Metricom decided to scale back the buildout, that the contracts read that they were required to keep purchasing
supplies and network connectivity as if the buildout were going at the full speed. This was a dreadful mistake on the part of past management, and
is what sped the demise of the company.

Whatever the cause ... it is truly a black day for the thought of unfettered, ubiquitous, anywhere you go Internet connectivity at a reasonable cost.
The promise of the 3G hype was already being delivered by Metricom in the form of Ricochet. But it has been blown.

Paul Allen got lucky once with an investment. He helped start Microsoft, which made him the third richest man in the world. That doesn't mean he
knows diddly squat about getting any other company to work and be big. Metricom had the potential to be huge -- all they'd have to do is get
enough subscribers to pay for the capital expenditures of running the network, and it would have been a cash cow. Such lack of vision for a man
who purports himself to be the King of Vision, to be acting as an entrepenurial force soley underwriting the creation of a "Wired World" vision,
and for him to falter in the funding of what could have been a huge cornerstone of that vision. Truly appalling.

- David
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