AT&T Trial Participant Sparks Fire Sale

3/01/2001 4:40 AM Eastern

The embers appear to have lost their spark at Winfire Inc., a
digital-subscriber-line Internet-service provider that is participating in
AT&T Broadband's 'Broadband Choice' technical trial in Boulder, Colo.

Steel Enterprise Holdings Inc., Winfire's parent company, said its board
voted in favor of selling up to 100 percent of its DSL ISP subsidiary, marking
the latest DSL reseller to fall on hard times.

Whether Winfire's potential sale could impact AT&T Broadband's
open-access trial has yet to be determined. AT&T Broadband spokeswoman Sarah
Duisik said Winfire is not hooked up to the trial yet, but the ISP has indicated
that it is still committed to applying resources to the project. However, Winfire's Web site noted that it is not
accepting new DSL registrations.

If Winfire decides to wash its hands of AT&T Broadband's trial, it won't
be the first to do so. Flashcom Inc. and FriendlyWorks Inc. also have dropped
out, Duisik said.

Flashcom filed for bankruptcy Dec. 8, while FriendlyWorks chalked up its
decision to scrap its role in the trial to 'business reasons.'

AT&T Broadband launched the test in November, offering a choice of ISPs
to about 500 customers. Because the test is technical in nature, the MSO is
offering those services free-of-charge during the life of the trial.

Participating customers currently have a choice of getting service from
Excite@Home Corp., EarthLink Network Inc., Juno Online Services Inc. and
AT&T WorldNet. Two other ISPs -- Internet Commerce & Communications
(formerly RMI.Net Inc.) and Microsoft Corp.'s MSN -- are in the process of
offering their services for the trial, Duisik said.

Winfire, meanwhile, is seeking a buyer.

'We are currently exploring several opportunities with alternative structures
for the sale, which include an outright transfer of ownership of the
corporation, as well as the sale of selected assets,' Steel Enterprise chairman
and CEO Chad Steelberg said in a press release. Winfire officials were not
immediately available for further comment.

Snapping up DSL facilities for cents on the dollar is a strategy High Speed
Access Corp. revealed last week. HSA said the equipment will be used to bolster
its commercial business in select markets and to market services directly to

In addition to the sale, Steel Enterprise said it will reorganize and focus
on Octive Technology Inc., its broadband-infrastructure firm, which licenses
network-operating systems to ISPs, 'last-mile' carriers and broadband-content

That restructuring will result in a 'significant staff reduction,' the
company said, without being more specific.

Winfire reported that it had about 57,000 subscribers by the end of the
fourth quarter, and it posted quarterly revenue of $2.5 million

Steel Enterprise said it is working 'to minimize any service interruptions'
as it entertains offers.

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