PSINet

[1][2] PSINet was founded in 1989 by Martin L. Schoffstall and William L. Schrader, who initially funded the company through personal loans, including using credit cards and by selling the family car.

Before 1990, the Internet had been largely funded by government agencies including DARPA (the original and still existing at that time, ARPANET), the National Science Foundation (NSF) for NSFNET, various U.S. federal agency networks such as the Department of Energy and NASA, and with grants to various regional networks including NYSERNet.

Many of the stake-holders of the Internet of the 1980s were military, industrial, or academic researchers who were largely satisfied with the then current model of usage and governance.

However, appropriate commercial usage policies were debated on such mailing lists as com-priv (commercialization and privatization of the Internet), within semi-public forums such as the Internet Engineering Task Force (IETF), and included an investigation by the NSF's Inspector General staff.

This included an intense debate on the "settlement model" of the Internet which was worldwide and both public and private in scope.

On May 1, 1995, the initial public offering listed its shares on the NASDAQ stock exchange under symbol PSIX.

[12] As a leader in the ISP arena, PSINet was frequently mentioned in trade publications for its accomplishments and reputation, some of it not flattering.

Despite its rapid growth and significant position in the commercial Internet services market, the company was never profitable.

Its acquisition spree was too overwhelming for them to manage and in addition to the executives with a voice-based telecom background (circuit-switched) they did not completely understand the nuances of a packet switched network.

It was a popular stock with analysts during most of the dot-com boom because of its rapid revenue growth and aggressive expansion plans, but by 2000, PSINet was beginning to struggle.

[17][18] Finally, overwhelmed by debts in excess of $3.7 billion and with dwindling cash reserves, the company announced on June 1, 2001, that it had filed for Chapter 11 bankruptcy protection along with 24 of its US subsidiaries, and that four of its Canadian subsidiaries had filed for protection under Canada's Companies' Creditors Arrangement Act (CCAA).