DENVER Jato Communications Inc., a beleaguered competitive service provider offering digital subscriber line (DSL) service, announced it would cease all operations at the end of the day Dec. 29.
Operations came to an end even earlier for the 66 remaining people in Jato's Colorado headquarters, who received pink slips and partial severance packages Dec. 28. By early Friday, a recorded message announcing the closure was on the company's switchboard.
One source said that if discussions with Lucent Technologies Inc. on jointly funded service ventures fail, the company will file for bankruptcy. Jato will use Chapter 11 rather than 7 for better distribution of assets, though no true reorganization of the company is planned. The company once had close to 600 employees, but it laid off the majority of its workers in two rounds of downsizing in the fourth quarter.
The announcement was hardly surprising, since Jato was considered by analysts to be the most troubled competitive carrier among a group of endangered DSL-based service providers that included Covad Communications Inc., NorthPoint Communications Inc., Rhythms NetConnections Inc., and ICG Communications Inc. Covad and Rhythms attracted new funding in the fourth quarter that may buy them some time, but analysts are predicting that NorthPoint and ICG (the latter company is already in Chapter 11 protection) will be fighting for mere survival in early 2001.