Jato shuts its doors

(Telephony) Jato Communications closed its doors the day after Christmas, becoming the latest casualty in the digital subscriber line (DSL) business. According to a report in the Denver Business Journal, the privately held Internet service provider began laying off most of its 575 employees as early as the end of the third quarter, and recently had fewer than 100 workers on hand.

Company officials could not be reached for comment. Callers to Jato’s corporate headquarters were greeted with the following message: “We regret to inform you that we are discontinuing operations in all markets we presently serve, and service will end on different days in different locations, but in all cases, very shortly. We cannot determine the exact date the service as it will depend upon when circuits are taken down by the appropriate carriers. We will attempt to keep them up as long as possible and apologize for any inconvenience. We suggest you contact local Internet service providers in your area.”

Denver-based Jato sold DSLs on a wholesale and retail basis to businesses in smaller metropolitan markets. The company’s investors include Lucent Technologies, the Mayfield Fund, Crest Communications Partners, CEA Capital Partners, ABN AMRO Capital, and TCI Satellite Entertainment.

In February 2000, Jato signed a five-and-a-half year deal with Qwest Communications that gave Jato access to Qwest’s fiber optic backbone and added several markets to Qwest’s DSL deployments. Qwest was to receive $25 million in payments from Jato. In return, Qwest was to invest $12.5 million in the company.