Copyright 2001 The Denver Post Corporation The Denver
Post
December 16, 2001 Sunday 1ST EDITION
SECTION: BUSINESS; Pg. I-04
LENGTH: 634 words
HEADLINE:
Hopes for telecom competition die with company
BYLINE: Jennifer Beauprez and Kris Hudson, TECH TOWN,
BODY: Here's the story of the company
that almost was, and the possibility that died with it.
The company planned to dig up your street and become
the 21st-century replacement for your telephone company. In doing
so, it could have lit the fiber-optic lines that now lie
unused between cities, actually completing that last-mile link to
homes - something so expensive most executives won't even consider
it.
The company planned to let you, the consumer - for
the first time - choose among several providers for your phone,
cable and high-speed Internet service.
But Open Access Broadband Networks died before it
could bring new life to high-speed competition.
The economy probably would have torn the company to
shreds anyway, just like it did the rest of the telecom world. But
what a ride it was.
Dave Maney conceived the
idea on April 28, 1999. In a rental car that gloomy spring day in St.
Louis, Maney and Jack Tankersley began to 'think out loud' about the
next big business idea. Tankersley, founder of Meritage Funds in
Denver, was an investor in Maney's company, Worldbridge Broadband
Services, a telecom services firm.
Maney
said he had been flirting with the idea of creating a fiber-optic
network to residential homes in 10 cities, including Denver. But his
expertise was in operating networks, not running them.
'Jack got that 'Jack look,'' Maney said. Eyebrow cocked,
he'd struck upon something intriguing.
They
would build such a network and lease it to multiple Internet service,
telephone and cable companies. Consumers wouldn't even know their
company existed - it would be an invisible road that big-name
companies leased. The duo soon created Open Access
Networks, which spun off from WorldBridge just after it sold in 2000
for $ 80 million.
For seven months, they ran the
marathon of assembling a powerful company. They raised $ 900 million
and recruited WorldCom director Jim Allen as chairman and a
management team drawn from Worldbridge and Credit Suisse First
Boston.
AOL, Microsoft, MindSpring and WorldCom agreed
to back the deal, promising to generate $ 1.7 billion each in revenue
annually off the network for the next 10 years. Investors wanted
those promises before they would back Maney's plan.
But when lawyers sat down to hammer out formal contracts,
a battle broke out over who would control the
network. 'We were trying to build it on the backs
of their commitments,' Maney said. 'It was a little bit of a
conundrum. You understood where they were coming from.'
By February 2000, they reached an impasse. Maney decided
to go back and raise money from investors without the big
guys' commitments. It was tough since plenty of others planned to
build their own networks, too.
'For 10
months we negotiated with AOL and the others, and by the time we went
ahead with our other plan, essentially all the pretty girls were
already dancing with somebody,' Maney said.
They had
managed to raise $ 500 million of their $ 1 billion goal when telecom
fortunes turned.
And that was the end of Open Access,
which turned out to be a good thing, Maney said. 'We would have
potentially been in deep trouble,' he said.
Maney went on to team with Philip Seefried - who was to
be Open Access' CFO - to launch a Denver merchant bank, Headwaters
MB LLC. 'A lot of what went on in our valiant effort was
a precursor to what we're doing now,' Maney said. 'Our reputation
is strong because of that.'
Too bad
consumers didn't benefit, as well.Jennifer
Beauprez (jbeauprez@denverpost.com) writes about technology and
the Internet. Kris Hudson (khudson@denverpost.com)
covers telecommunications.
Document 9 of 16. 