Cable firm Omne Communications, which has been building a high-speed network in southern Scotland and the north-west of England, announced over the weekend that it has called in the administrators.
The company, which is understood to have failed to raise sufficient new funding, is making around half of its 200-strong workforce redundant. It blamed its financial problems on the ongoing slump in the telecom sector.
Omne has already spent some £70m building its cable network in partnership with Alcatel, and has some 5,000 customers. Its target was to provide broadband and cable television services to 300,000 customers in places such as Lancaster, Morecambe, Dumfries, and Galloway and Ayrshire.
Omne said it was hoping to secure new investment, and is hoping that entering administration will enable it to restructure and survive.
If Omne does collapse, then many of its potential customers will be left with little chance of getting affordable high-speed Internet access in the near future. Many people living on the outskirts of towns and in rural areas are unhappy that BT has not broadband-enabled their local exchanges. Telwest and ntl, with whom Omne was hoping to compete, are also not an option -- except for those living close to major metropolitan areas such as Manchester and Liverpool.
Some observers have demanded that the government helps the rollout of broadband by subsidising the infrastructure costs. These calls may grow louder if Omne fails to recover.
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