Subject: [NEXTEL-1] Cometa Networks Closes Its Doors Starting Tomorrow

From: [email-masked]
Date: Tue, 18 May 2004 23:18:04 -0400

Cometa Networks Closes Its Doors Starting Tomorrow

May 18, 2004

Cometa Networks has confirmed
that they are ceasing operations

 Wi-Fi Networking News was able to confirm through multiple
independent and reliable sources this morning that Cometa
Networks http://www.cometanetworks.com/index.shtml will
start the process of running down its hotspot network operations
tomorrow. Cometa vice president of marketing Kent Hellebust
acknowledged the news in an interview early this afternoon.
"We've built a profitable business in the Seattle test market and to go
national requires additional capital," Hellebust said. The company was
unable to obtain the capital necessary for this expansion, and will wind
down operations through phases to best serve existing venues and
resellers rather than abruptly terminating service to subscribers and
locations. "The networks will be running for coming weeks and then
will be phased out," Hellebust said. "The employees have been notified
at Cometa Networks."

Cometa Networks was funded by Intel Capital, the company's investment
arm, and two venture capital firms. AT&T and IBM committed resources to
the project as well. From the start, Cometa was treated as dubious by
many established players in the industry due to their frequent claims
that
they would install 20,000 locations with Wi-Fi service within two years
of
their Dec. 2002 launch. But their high-profile backers meant that Cometa
might be in a position to make good on their projections.

Their model was to resell these locations to cell operators and other
partners of that scale, as well as to aggregators like iPass. After more
than a year of operation, Cometa had a handful of partners and about
250 locations, including 150 trial service hotspots set up with
McDonald's
in the New York tri-state area and Seattle and most of the rest across
many kinds of venues in their Seattle test market.

However, McDonald's opted for Wayport to install Wi-Fi in its over
12,000
domestic U.S. stores and franchisees. This decision quickly caused
Toshiba,
another McDonald's trial partner, to close its hotspot operation and
start
work
to transfer locations to Cometa. Cometa was able to announce that Barnes
&
Noble had chosen Cometa to build and resell access to its over 550 U.S.
bookstores, which seemed like a big step in Cometa re-establishing
itself
as
a growing operator with locations that were worth reselling and
aggregating.

Cometa put a brave face on its future in an interview with Wi-Fi
Networking
News (http://wifinetnews.com/archives/003242.html) on April 21, 2004.
The
company's CEO and a vice president painted a picture of a more
conservative
growth pattern that reflected more of the pattern followed by FatPort
and
Surf
and Sip, smaller but steadily growing hotspot operators that emphasized
partnerships, reselling, and cash-flow positive short-term goals. VP
Hellebust
said today that Seattle subscribers and revenues were growing. "We feel
proud of what we've achieved in the Seattle test market."

However, the company's capital resources couldn't support their model,
and
Cometa Networks will start running down its clock, with the end date not
yet
determined.

Cometa's former chief technology officer Michael Kleeman said in an
interview today that Cometa had built a business-class network, "but if
you don't get
up to scale, don't get up to revenue, then you are going to fall short."
He left
the firm in October, and has focused on consulting on aspects of
networking
involving voice over IP and, separately, national security.

Kleeman said that each of Cometa's partners-Intel, AT&T, and
IBM-provided
invaluable support and education in building a national network that met
the needs of business customers. But even with this backing, he said,
"You still have
execute.

Even if with big parents, startups still have to be scrappy." He credits
Cometa with establishing a high mark for service quality.

 http://wifinetnews.com/archives/003349.html

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