ENGLEWOOD, Colo: High-speed Internet access company Rhythms NetConnections
Inc. said on Friday it will end service in a month and fire 700 employees, or 75
per cent of its work force. Rhythms said it sent 31-day service-termination
notices to all of its customers on Thursday evening. It said it would assist its
customers in shifting their existing digital subscriber line services to
alternative providers.
Englewood, Colorado-based Rhythms, a provider of digital subscriber line
service over ordinary phone lines, earlier this month filed for Chapter 11
bankruptcy protection in New York, becoming the latest casualty in the battered
telecommunications market.
Companies that provide high-speed digital subscriber line, or DSL, Internet
access have been hurt by the slowing U.S. economy, heavy competition, the
inability of many customers to pay their bills and a marked tightening of
capital markets. Earlier this year, rival NorthPoint Communications Inc., which
had as many as 100,000 business customers, shut down its network and sold its
assets at fire sale prices.
Other emerging telecommunications carriers, such as PSINet Inc., Teligent
Inc., 360Networks Inc., and Winstar Communications Inc., also faced a
cash-crunch and filed for bankruptcy. Rhythms' investors included prominent
Silicon Valley venture capital firm Kleiner Perkins Caufield and Byers, software
giant Microsoft Corp. and Dallas-based buyout firm Hicks, Muse, Tate & Furst
Inc.
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