Bankruptcy blow for Ethernet

Ethernet evangelists may be suffering a crisis of faith after Yipes Communications, which espoused the technology as a cure for cheap fast telecoms, applied for bankruptcy protection.

Yipes, which had raised $291m in venture capital funding in its first three years, competes with AT&T and Verizon Communications by offering businesses double the normal internet connection speeds at half the cost using cheaper Gigabyte Ethernet technology.

The bankruptcy filing is seen as another example of the difficulties start-up internet service providers have had against bigger rivals even when offering superior technology.

DSL enthusiasts Rhythms NetConnections and NorthPoint Communications folded last year, having been unable to take on the bigger telcos.

Yipes customers include the Chicago Stock Exchange, University of Pennsylvania and the US Geological Survey.

But a Yipes representative said that, although it was down, it was not out, as the company would continue to provide a service to customers.

Chapter 11 bankruptcy allows a business to reorganise without having to worry about creditors for a while.