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Free DSL provider Winfire on block amid questions

The parent company of Winfire, a free DSL provider, announces plans to sell the high-speed Internet subsidiary and will lay off most of the staff as part of a restructuring effort.

    The parent company of Winfire, a free DSL provider, announced Wednesday that it plans to sell the high-speed Internet subsidiary and will lay off most of the staff as part of a restructuring effort.

    But rumors persist that Winfire may already have laid off its work force and shut down operations, including consumers' broadband Net access.

    Winfire representatives could not be reached to confirm or deny the speculation.

    The free ISP market has suffered over the past year and many providers have either gone out of business or have attempted to shift many free customers to paid Net-access services instead. Many analysts and company executives questioned whether the economics of broadband Net access are ready to support a free service. UrbanMedia hoped to offer free broadband Net access to attract business customers but ran into trouble earlier this year.

    The board of directors for Steel Enterprise Holdings has voted to entertain acquisition offers for Winfire, formerly known as FreeDSL.com. The holding company also plans to lay off the majority of Winfire's staff, and instead focus its efforts on Octive Technology, a communications software company.

    "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 selected sale of assets," Steel Enterprise Holdings chairman Chad Steelberg said in a statement. "In any event, I want to reassure our Winfire customers that we are working to minimize any service interruptions."

    Winfire representatives did not return repeated attempts to reach them seeking comment. Calls to the company's customer support hotline Wednesday were greeted with a message indicating Winfire was having "technical difficulties" with the phone system and which suggested callers try again Thursday.

    Calls to the company's customer support hotline Thursday were met with a message saying the company was undergoing "a transition" that prevented the firm from answering its calls. However, the message indicated that Winfire will contact its customers shortly via e-mail.

    Some CNET News.com readers said in e-mail messages that they believe Winfire DSL connections were shut off Wednesday morning and that the company's staff already had been laid off. Similar postings on F***edCompany.com, an online message board that tracks the demise of dot-coms, suggested Winfire employees were told to pick up their final paychecks Wednesday.

    Based in Newport Beach, Calif., Steel Enterprise Holdings was formed recently to separate Winfire from Octive, a unit that manages the order taking, billing and network operations software used by Winfire. The free DSL provider planned to license its Octive software to other communications service providers but reportedly had trouble doing so given Winfire's status as a competitor, leading to the formation of Steel Enterprise Holdings.