The overnight collapse of Intelenet Inc., a local Internet service company, has left hundreds of its customers in a lurch.
Intelenet, which provided dial-up Internet access and Web page service, shut down last Thursday, cutting off Internet connections temporarily for as many as 1,500 Utahns. The action also suspended access to Web pages of at least 60 customers.Among the Web pages affected are those belonging to Utah's most high-profile entities - the Salt Lake City 2002 Winter Olympics Committee, the Salt Lake Convention and Visitors Bureau and the Utah Information Technologies Association.
Some Intelenet customers contacted by the Deseret News say the service interruption and the way the transition was handled caused lost business, tarnished reputations and has shaken their confidence in the Internet industry.
"I can't believe the company didn't have a clue that things were precarious," said Jarret Rush, owner of Cave Communications in Roy. "I would have liked to have known. On the other (hand), there is a certain part of corporate information you keep to yourself and hope you can resolve and come out smelling like a rose. In this case, they didn't."
The Intelenet saga, some observers say, illustrates the instability of the immature Internet service provider industry and may foreshadow more shakeups to come.
Many Intelenet customers first learned something was amiss last Thursday or Friday when they couldn't access their Web sites or e-mail, or received concerned calls from people who couldn't access their pages.
"We came in Friday morning and everything was shut off," said Matthew Jones, president of MCR in Provo. "There was no notice whatsoever. We called (Intelenet) Friday morning to leave a message for a technician to get back to us and the mailbox was full. That's when we realized something was up."
For Zinc Software of Pleasant Grove, the shutdown came at the worst possible time. Two days earlier it mailed letters describing a new product to 15,000 customers and inviting them to visit Zinc's Web site to download a demo copy. But until yesterday no one could access Zinc's page.
"I have no idea what that cost us," said Larry McFarland, president. "We looked out of business."
The demise of Intelenet, however, was only the beginning of the bad news for some of its customers. About a dozen entities discovered Intelenet failed to forward their payments to US WEST Communications for high-speed lines they used.
Jones learned his company owed $3,300 to US WEST. He has heard reports of bills ranging from $250 to $13,000 from other companies in the same predicament.
The businesses must cover the bills before US WEST will reconnect their service.
One of MCR's clients was the (Windows95.com) Web site, which although not sponsored by Microsoft is a premiere resource for information about its Windows95 product. The site receives 3 million hits a day.
But MCR no longer has the account. The owner of the site called last Friday and canceled the arrangement with MCR because of the shutdown, Jones said.
"It (the loss of service) cost us about $7,500 a month worth of business," Jones said. "We're pretty upset. We could have made other arrangements had we had a little notice."
Another group of customers out of luck are those who prepaid Intelenet six months or a year's worth of dial-up Internet access. They'll have to sign up with a new provider and consider the payments to Intelenet a loss.
As Intelenet went down, it negotiated with a local competitor, Vyzynz International Inc., to buy some of its equipment and its customer list - and hopefully minimize disruptions to customers. But it took days for some customers to make new arrangements for e-mail service and to restore their Web pages.
Intelenet, which filed incorporation papers in April 1995, landed in desperate straits last week. The company was out of money and being forced from its office in the Triad Center.
"Intelenet really didn't have any money to continue business or even to stay in their business location," said Kevin McBride, Intelenet's attorney. "There were two choices: go out of business and have no transition whatever or sell and do the best to continue operations."
Intelenet chose option two and broached a sale to Vyzynz International. While Intelenet is no longer actively engaged in business, it has not declared bankruptcy and no decision has been made on whether to do so, McBride said.
Representatives of Vyzynz and Intelenet apparently began initial talks Wednesday. They met again Thursday from 10 a.m. to 6:30 p.m., broke for three hours and then continued discussions until 4 a.m. Friday, when a sale was consummated.
"During Thursday's meeting it became evident that as a result of the impending condition of that entity, a transaction had to happen quickly, right then," said Vyzynz President Justin Reber.
"We've done every thing possible to make this thing as smooth as possible," Reber said.
Intelenet pulled the plug on its customers about 6 p.m. Thursday as negotiations with Vyzynz continued.
"We didn't have any say in the decision. We couldn't talk to anyone," Reber said. "I had no control over the methodology chosen. That's their (Intelenet's) call."
Though his company didn't officially own the equipment then, Vyzynz technicians began restoring limited service so e-mail messages weren't lost.
On Friday, Vyzynz representatives began calling Intelenet customers to inform them what had happened and to sign them up as clients - which came as a shock to some Intelenet customers.
"We got the call from Vyzynz that told us they were the new owners and we said `Wow, we don't even know who you are. Come and tell us,' " said Mike Korologos, spokesman for the Salt Lake 2002 Winter Olympic Games.
It took days to reach some customers, though. The Convention Bureau wasn't contacted until Wednesday, and spent days in a quandry wondering what had happened and why.
"What I liken this to is that a business up on the Internet is equivalent to leasing space in downtown Salt Lake City and one day you come to work and someone has bolted your door, turned off the lights and you have no right to get into your own business," said Jeri Cartwright, bureau spokeswoman.