Cometa Closes

Cometa Networks Inc. -- the startup that launched with grand plans to hotspot entire cities in the U.S -- is closing down after less than two years in business.

A spokeswoman confirmed that the company is shutting down tomorrow, but couldn't offer much more in the way of detail.

"There will be an announcement tomorrow," she told Unstrung.

Everything looked much brighter for the company back in December 2002. Backed by undisclosed amounts of money from big names such as AT&T Corp. (NYSE: T), IBM Global Services, and Intel Corp. (Nasdaq: INTC), the company announced plans to roll out at least 25,000 access points in cities across the U.S. and sell wireless LAN access wholesale to would-be wireless service providers (see Rainbow Unveiled).

But there were always rumors of trouble at Cometa.

The firm's original CEO left after less than four months on the job to spend more time working as a first responder for the Center for Disease Control (CDC) (see His Brilliant Career).

By July of 2003, it was clear that the firm had fallen far behind its ambitious rollout targets (see Cometa's Hotspot Hassles). And the company ended up using a "placeholder" billing system while it waited for software from AT&T and IBM (see Cometa Leans on Startup).

But what may prove to be the straw that broke the camel's back was Cometa's failure to win the lucrative McDonald's hotspot contract, which Wayport Inc. seized instead (see Wayport Macs Up).

Toshiba America Information Systems also decided to exit the hotspot game after losing out on the McDonald's deal and ceded its existing network to Cometa last month. (see Toshiba Hotspots Go Cold).

Cometa's flameout is likely to make many industry watchers once again question the viability of the entire hotspot model.

— Dan Jones, Site Editor, Unstrung