ISP Channel is closing its doors at the end of the year, officials said Monday.
The announcement marks the final step in SoftNet System Inc.’s systematic shutdown of its troubled cable Internet subsidiary.
SoftNet’s board of directors expect to spend between $28 and $30 million in the next month to completely close down ISP Channel’s operations, including the write-off of non-cash net assets.
In November, ISP Channel penned a deal with High Speed Access Corp. to take over its contracts with independent cable operators. It’s possible ISP Channel will be held accountable if these cable owners decide not to switch to High Speed and want to run out the current contract with ISP Channel.
Officials were not available for comment on any outstanding affiliate and equipment contracts.
SoftNet had seen the possible demise of its ISP Channel for months now, shedding more than 50 percent of its employees since October and imposing a $30 million budget cap to just come out even when it shuts the doors.
Officials expect to come out cash-neutral, and have moved their fiscal year 2000 report back to Jan. 4 to account for the company’s liquidation.
ISP Channel faced a mountain-high challenge when it opened its doors on July 31, 1997. Its business model was dependent on the revenue-sharing agreements it made with independent cable operators, providing customer support and marketing to grow cable Internet services nationwide and in Canada.
But the service never took with major cable network owners like AT&T, Time Warner and Comcast. Instead, ISP Channel found itself partnering up with local and regional independent cable operators. That, officials said, prevented the company from achieving the economy of scale necessary to run a successful business.