Aerie bids again for Metricom assets
The broadband provider is once again trying to buy the remaining assets of bankrupt Metricom, which offered the high-speed wireless "Ricochet" Internet service.
An Aerie Networks spokeswoman said the company has offered to buy "certain assets and intellectual property," including the U.S. patents awarded to Metricom, for about $8.25 million. The proposed deal goes before a U.S. Bankruptcy judge on Friday for possible approval.
This is the second time Aerie Networks has bid for Metricom. In September, the company said it wanted to buy Metricom's assets for $20 million and indicated it was planning to relaunch the wireless network in California and Colorado. But that bid was rejected.
The new, and lowered, bidding price may be because most of the company's assets have lost value in the weeks after the initial bid was rejected.
For example, in a cost-saving move, U.S. Bankruptcy Judge Arthur Weissbrodt ordered that the "guts" of the network--hundreds of wireless access points and 16,000 radios that sit on top of light poles--be abandoned or dismantled because they were costing the company money to maintain.
Any new owner would have to not only rebuild the gear but also renegotiate leases with the cities and towns where these light poles are located, sources said.
"The assets decline in value daily," Aerie Networks Chief Executive Morton Aaronson has told the bankruptcy court during past hearings.
If Aerie Networks is successful in buying the assets, it could be years before the network is relaunched. One of the biggest obstacles is obtaining the licenses for the radio frequencies that power the network. The rights to use the frequencies, which Metricom owns and values at $50 million, are not part of the new, proposed deal, sources said.
Aerie Networks spokeswoman Emily Kelly said she wouldn't comment about what Aerie Networks was actually bidding on, or what the company has in mind if its bid is accepted.
"We've got lots of plans cooking, and until we own it and this is all over, we won't be talking about them," she said.
A representative for Metricom could not be reached for comment Monday.
Attorneys representing the bondholders and other creditors were not commenting on Aerie Networks' latest bid.
Metricom built the wireless, high-speed Internet service in 14 cities using $1 billion in investments from high-tech luminary Paul Allen's Vulcan Ventures and long-distance provider WorldCom, among others. The network was turned off in August after the company filed for bankruptcy protection.
Ricochet's 51,000 subscribers, who paid as much as $80 a month for service after buying a modem for $300, are still the service's biggest fans. They have been sending companies like Wireless Web Connect, which resold the Ricochet service, thousands of e-mails demanding the service be turned on again.
Sources said the Aerie Networks bid is one of three that the attorneys and investors are entertaining for Metricom. Information about the other two possible bidders was not available Monday.