Digital Broadband files for bankruptcy

The Internet service provider--which laid off 85 percent of its work force two weeks ago--says it will continue to support customers through Jan. 12.

Digital Broadband Communications, a high-speed Internet and local phone service provider, announced Wednesday that it has filed for bankruptcy protection.

The service provider--which two weeks ago laid off 450 of 526 employees, or 85 percent of its work force--will continue to operate and support customers through Jan. 12, the company said in a statement.

Digital Broadband is a privately held carrier that offers high-speed Net access via digital subscriber lines (DSL) and local phone service to about 1,000 business customers in seven northeastern states.

The company is helping its customers find other service providers for their DSL and local phone service needs, a company representative said Wednesday.

Digital Broadband is just the latest high-speed Net provider to struggle financially this year as the stock market downturn and resulting shortage of investment capital have forced it and other providers to abandon their grow-at-all-costs strategies.

Big customer demand for high-speed Net access encouraged many new service providers to borrow and spend heavily to gain market share. But balky investors quickly put an end to those plans, forcing companies such as Covad Communications, NorthPoint Communications, PSINet and others to lay off workers, restate earnings and consider takeover offers.

When Digital Broadband announced layoffs two weeks ago, company executives said they would seek out new investors and possibly a buyer. The company in a statement Wednesday said it had not found any investors or potential buyers.