DigitalPath down for the count

An executive from DigitalPath Networks announced Tuesday that the company would close its doors sometime this week due to intense competition from much larger Internet service providers. It was unclear at press time what would happen to the company’s customers, whether they would be offered new service by one of DigitalPath’s corporate partners or if they would be left to find new service on their own.

DigitalPath was started in 2002 by Chico entrepreneur Jim Higgins, who came up with an innovative twist on wireless Internet transmission that allowed a signal to be beamed to and from customers via a network of receivers and relay stations set up on subscribers’ rooftops. This involved mapping out the locations of trees and other obstacles that would interfere with the radio waves used to transmit the ‘net signal and then placing relay “dishes” in strategic places.

While the company claimed it could provide Internet at speeds comparable to DSL and cable, many customers found the service spotty. Yet the technology must have shown some promise because at one point, the company boasted partnerships and investment deals with several high-powered Internet service providers (ISP), including Earthlink and AOL.

When the Chico News & Review ran a cover story about DigitalPath last year ["(Un)wired for success,” June 10, 2004], the company had grown from just two employees working out of a tiny California Park office to a regional ISP with 87 employees and a large facility on Airpark Drive. At that time, investors were lining up to get a piece of the company, with capital funding reaching more than $5 million for 2004. At its peak, DigitalPath offered service to some 19 towns in Northern California and had plans to branch out to Nevada and eventually, the rest of the United States.

When the company made its announcement this week, it was down to some 45 employees. While there is a small chance the company could be sold and kept running, sources told the paper, the prospect appears remote.

On Wednesday, the company’s Website was still up, offering new subscriptions for service, installation specials and the like. The company news page had apparently not been updated since May 2004 and did not reflect the recent closure. Calls to the customer service line were routed through a phone maze that invariably ended with a voice mail box that did not accept new messages.

Barry Sherwood, owner of Chico’s Sunset.Net, an ISP that resold DigitalPath’s service, said he was told by phone Monday at about 9 p.m. that the company would begin shutting down the next day. The explanation given to Sherwood was that investor funding for this year’s operations had been pulled, leaving the company with little choice but to close.

Sherwood said the technology DigitalPath used was "promising," and that customers were generally satisfied with it. About 20 percent of subscribers were "elated" with the service, he said, but added that roughly the same percentage was extremely unhappy with it and often switched to another type of broadband.