Metricom rejects $20 million offer for assets

Metricom, the bankrupt owners of the high-speed wireless Ricochet Internet network shuttered last month, has spurned a $20 million offer from Denver-based Aerie Networks to buy all the company's assets, a spokeswoman for Aerie Networks said Friday.

But Aerie Networks is still in talks, behind closed doors, to buy portions of the Ricochet network that once powered wireless Internet access for 51,000 customers in 14 states, according to an Aerie Networks spokeswoman. The asking price for the intellectual property, inventory and other equipment is about $2.5 million, according to the spokeswoman.

The radio spectrum needed to power the network, valued at $50 million, is not part of the assets under discussion, according to Aerie Networks. A bankruptcy judge hearing the Metricom case set a Sept. 17 deadline for Metricom to either accept or reject the $2.5 million offer.

A source familiar with the negotiations sounded a hopeful note on Friday.

"It's not over," the source said.

A Metricom spokesman wrote in an e-mail to CNET News.com that "the negotiations between Aerie Networks and Metricom did not result in agreement." The spokesman did not elaborate.

The Ricochet network provided wireless Internet access for laptops and handheld devices at more than twice the speed of a dial-up connection. After building a nationwide network for an estimated $1 billion, the San Jose-based company was only able to attract about 51,000 customers. It shut down the network and filed for bankruptcy after failing to find a buyer for the company.

Last week, Aerie Networks surfaced as a bidder. During a bankruptcy court hearing, Metricom attorney Margaret Sheneman told a bankruptcy judge that Aerie was in negotiations to buy portions of the wireless network in six states, enough to "re-light" the network in California and Colorado.

But both sides were not commenting Friday about whether those same pole top radios and other network gear are part of the deal now being hammered out.

Aerie Networks is having some difficulties of its own. The company had plans to build a $3.5 billion, 20,000 mile fiber-optic network that it said would have made it one of the major Internet service providers in the country. But the company has decided to drop its construction plans. Instead, it is now exploring a way to act as a reseller of Internet services offered by other Internet service providers, according to the company.