Transatlantic Cable: Farewell to Ricochet

Our man in San Francisco, Richard Baguley looks at the rise and fall of Ricochet - a pioneering wireless internet outfit with plenty of devoted users.

According to the industry website webmergers.com, July was a relatively good month for the internet industry, with fewer companies going bust than at any time since September 2000. And although the cynics might say that it is just a case of all of the companies based on really stupid ideas going bust (while the stupid ideas will last a few more months), things do seem to be levelling out a little bit. However, there are still some major companies going to the wall, including one that made me rather sad: On the 2 July, wireless internet provider Metricom went into Chapter 11 bankruptcy and began to close down its operations. I wrote about Metricom's Ricochet service some time ago (Transatlantic Cable: Something in the air http://www.silicon.com/a40837 ): it provided wireless internet access that was light years ahead of the other options available in the US. While wireless internet over a cellphone was still in its infancy here, its service was relatively fast (at 28kbps), came with unlimited use and worked. More recently, it jacked up the speed to an impressive 128kbps: significantly faster than any other mobile wireless service I've seen. Although it certainly wasn't glitch free (such as the annoying hole in its coverage on the freeway which scuppered my plans to play online games during my commute), it worked pretty well, and many people came to rely on it as their primary means of getting email. Websites such as savericochet.com have quickly filled up with stories from people who relied on the service to stay in touch. Unfortunately, things were not all well within the company. The process of rolling out a wireless network based on relatively small cell sizes (and thus requiring an awful lot of access points) was expensive, and an extensive TV advertising campaign in the 13 cities that it covered also helped to eat through the cash, until the company was left with debts of more than £1bn and not enough money to cover them. And so, it went bust, leaving several large creditors (including, ironically enough, one of its major shareholders WorldCom) with large unpaid bills. According to one press report, the company spent $88m on building a network on one city, only to then decide not to launch the service in that area. Ricochet's network went dark last week as the remaining employees of the company turned off all of the access points. And the final indignity: next week, its network, patents and other assets are to be sold off to the highest bidder with no guarantee that they will re-launch the service or do anything other than strip it down for parts. As I've said before, I was seriously impressed with Ricochet. But it always somehow failed to live up to its potential. And at least part of this was because of the way it charged for the service: To use it, you had to first buy a modem (at a cost of around $200). You then had to buy the service, with the 128kbps service costing an expensive $80 a month. In the end, this relatively expensive combination meant that they had only 34,500 subscribers for their 128kbps service and 16,700 for their cheaper 28kbps service. With this rather minimal number of subscribers, it is not surprising that the money started to run out. It is really a question of a missed opportunity. I think if the company had pushed the service more aggressively and offered more flexible pricing plans, it would have attracted more subscribers. For instance: if it had offered a free modem with a year's contract for service, that would have meant a far more attractive up-front price. And lowering the cost of the service would have made it a strong alternative to DSL, which is available in the US for around $50 per month. But as it is, myself and many other users are left with a wireless modem that can't be used with any other service. Although they aren't completely useless: some enterprising hackers have worked out that some models can be used in a peer-to-peer mode, so you can create a small wireless network with two modems that works over a longer range than a typical 802.11B network. Of course, it is possible that someone may decide to buy the entire network with a view to re-launching it, but there has not been any interest expressed so far from the obvious candidates - the large, well funded telcos who would like to add high-speed net access to their list of services. So it seems that the last chapter in the history of Ricochet may have been written. I'd love to be proved wrong, but it seems that in the history of internet access, this particular service will be nothing more than a footnote...