Digital Broadband declares bankruptcy

(Telephony) In another blow to the DSL sector, Digital Broadband Communications has declared bankruptcy and said it will halt service on January 12.

Two weeks ago the company cut, “a substantial portion of its workforce” in an effort to extend its viability. This course of action has become a familiar one in the DSL space, which has seen a rash of staff cuts in recent weeks amid tight capital markets and plunging stock prices.

“Due to a substantial downturn in the financial markets, we were unable to attract sufficient additional financing to maintain our growth,” said to a statement on Digital Broadband’s web site. “After the reduction in force, we have continued to pursue strategic alternatives, but to date none has materialized. Therefore, we now find it necessary to seek bankruptcy protection and wind down our business in an orderly manner.”

As part of this winding down, the message encourages customers to seek out new ISPs. Almost all staff has been cut and the company is operating with a small technical and operations crew to assist the transitioning of its approximately 1000 customers.

The portions of the bankruptcy filing that were immediately available did not include an estimated value of the Digital Broadband’s assets. The list of creditors, though, contains some familiar names.

Cisco Systems Capital and Cisco Systems combine for more than $70.5 million of Digital Broadband’s debt, most of that unliquidated. Other creditors include Verizon, owed more than $11 million, SNET at $1.6 million and Eftia OSS Solutions with about $688,000.