Count another victim of the devastating environment for retail digital subscriber line carriers: Digital Broadband Communications of Waltham, Mass., today said it is firing 85 percent of its workers and seeking a buyer.

Unable to secure investment cash needed to build its network of high-speed Internet and data connections, Digital Broadband said it would lay off 450 of its 526 employees.

Valeri Marks, who just five months ago became CEO of the privately held, 21-month-old company, said the 76 remaining employees would for now continue to serve all 1,000 customers in seven Northeastern states. Two of the Digital Broadband's 15 offices will close, in Baltimore and Pittsburgh, with customers in those areas to be served by staff in other offices.

Marks said the company is "looking at all strategic options," including a merger or acquisition. She said "lots of discussions are underway" with possible buyers but declined further comment.

Marks also declined comment on the fate of Digital Broadband's contract with the Massachusetts Community Network, an agency created last year to make Massachusetts the first state to provide cheap broadband Internet access for every one of its schools and public buildings.

A brushfire is clearing deadwood from the sector of DSL resellers, even faster than the resellers themselves burned through venture cash in an effort to build their DSL networks.

HarvardNet of Medford Mass., last week quit the DSL business and fired 280 of 480 workers. In the last month NorthPoint Communications (248 workers), Covad Communications (400), DSL.net (141) and New Edge Networks (135) all slashed their workforces, while Flashcom declared bankruptcy.

Twelve or even six months ago, when the capital markets were still buoyant, things looked quite different. Venture capital and infrastructure firms were happily throwing cash at DSL retail networks, encouraging them to build networks as fast as possible to secure the large number of customers needed to turn a profit.

But with the stock market having gone south, venture investment has become much tighter. Investors are looking to back businesses that can become profitable in one or two years, and many of the DSL resellers were built on plans that saw the break-even point in 2004 or 2005.

For its part, Digital Broadband got $175 million, $85 million last year from Cisco Systems to buy Cisco-made data switches and routers and, just last May, $75 million from venture firms, $50 million alone from Thomas H. Lee Partners of Boston.

CEO Marks said her company was following its business plan to the letter: "We were hitting all our numbers, we were tightly managing expenses, we were executing quite well. But we can't control the external markets. Building a broadband network requires a lot of cash, and the capital markets have completely shifted. Unfortunately, we weren't able to find anyone willing to invest in this climate."

George Peabody, a telecom analyst for Aberdeen Group in Boston, said, "Clearly the 'Build it and they will come' model is done for for the time being. Once the party balloons hit the floor, investors started to ask when their investments would start to pay."

Peabody continued, "We saw a similar thing with (Internet service providers) -- everyone dropped prices to get customers as fast as possible, and then the only way to make money was to get really big. That kind of a market squeezes out the smaller players, and that's what we're seeing now in the DSL world."

Industry observers agree that deep-pocket DSL players -- especially the old Baby Bells like Verizon and SBC Communications -- have a huge edge in today's marketplace.

Another local DSL network, Vitts Networks of Manchester, N.H., says it will thrive by providing a menu of network services besides basic DSL connections. Vitts says its DSL business has spiked in the past few weeks as competitors have dropped by the wayside.