Starry’s Broadband Ambitions Fall Apart, Lays Off More Employees

Broadband

from the if-at-first-you-don't-succeed dept

You might recall that Aereo founder Chaitanya Kanojia’s attempt to disrupt the TV industry ran face-first into an army of broadcaster lawyers and a notably ugly ruling by the Supreme Court. Undaunted, Kanojia returned with a new plan to try and disrupt the broken U.S. broadband industry.

But that plan isn’t going so hot either.

Kanojia’s new company Starry, founded in 2016, promised users uncapped, gigabit wireless broadband at lower rates than most incumbent ISPs. And while the project had a promising start, the company recently ran in to some nasty headwinds. Last October, the company announced it was halting all new installations and laying off 508 employees as it battled its stock from being delisted.

Recently, an SEC filing indicated that the company was laying off another 100 employees. Apparently, the company simply started running out of money after an aggressive network expansion. According to Kanojia, the company was curtailing its cash burn while it “explores strategic options.” The company recently struck a deal for some interim financing:

Last month, Starry struck an amended and restated credit agreement with lenders that provides interim loan financing of more than $11 million. The agreement also puts Starry in position to access additional financing “through an uncommitted accordion debt basket of additional loans of up to $30 million.”

One strategic option could also involve the sale of part or all of the company.

Much like Google Fiber and Alphabet, Starry found challenging entrenched U.S. telecom monopolies to be an expensive and steep uphill climb. Incumbent telecoms not only dominate the market, they dominate most local, state, and federal policymaking thanks (in part) to their cozy relationships with both the intelligence and first responder communities.

That generally results in competitive roadblocks at every turn, even if you’re lucky enough to be able to afford broadband expansion. It’s why an estimated 20-40 million Americans still lack broadband, and roughly 83 million U.S. consumers live under a broadband monopoly.

Filed Under: broadband, competition, disruption, gigabit, wireless
Companies: starry