Flashcom trades DSL customers like chattels

Indebted

By Linda Harrison in New York • Get more from this author

Posted in Business, 22nd January 2001 21:28 GMT

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US ISP Flashcom.com has been forced to flog most of its DSL customer accounts in an effort to stem losses.

Debt-ridden Flashcom has already lost control of more than half of its accounts to wholesale service providers Northpoint Communications and Rhythms NetConnections - who have shifted users to different ISPs. The company is also looking to sell off the rest of its assets, including its other subscriber accounts - currently in the hands of Covad Communications and other regional providers.

The move follows the dotcom ditching its IPO and filing for bankruptcy protection under Chapter 11 in California last month. It is trying to reorganise itself to make a profit, according to a statement on its Website. It has also laid off around 75 per cent of staff, more than 100 employees.

But the remaining customers still under contract with Flashcom may have a rough ride. The ISP warns that if the accounts remain unsold, or if it cannot persuade the bankruptcy court that it can run them at a profit, "their service will be terminated, perhaps with little or no advanced notice".

If these DSL users are locked into a contract they are pretty much stuck and have to continue paying the monthly fee for the service, eveb though fewer customer service staff available. Flashcom says they cannot be released from their contracts without approval from the bankruptcy court.

Flashcom, which claimed to have 31,000 customers in May, is just one of many DSL providers scrambling to survive the US market. Earlier this month Seattle-based rival Bazillion shut its doors, giving users just days' notice their DSL service would stop.

More information can be found at Flashcom. ®