1,000 Anaheim Customers Lose Communications Service

A communications company has scrapped its contract with Anaheim, forcing about 1,100 customers to seek other providers for telephone, Internet and digital subscriber line services.

Verado Holdings Inc. said its FirstWorld Anaheim unit ended its agreement with the city to eliminate operating losses and cash outflow stemming from the contract.

FirstWorld is helping customers line up another service provider, Melanie Nieman, communications officer for the Anaheim Public Utilities Department, said Thursday.

In order to terminate the contract, Verado must cease operations in the area and transfer fiber and equipment to the city.

“We see it as a win-win situation,” Nieman said.

Anaheim, which made more than $4 million in three years through the partnership, gets to keep the 22 miles of fiber cables, which FirstWorld Anaheim installed. The cables are worth about $7 million, Nieman said.

The communications company will retain ownership of its switching equipment and the fiber that connects to customers in Irvine.

In 2000, Verado lost $117.7 million, or $2.46 a share, from continuing operations on revenue of $8.19 million.

The stock, which has lost more than 97% of its value over the past year, was unchanged Thursday, closing at 47 cents a share in Nasdaq trading.