KeyOn Communications eyes sale

The future of an Omaha-based rural broadband and telecommunications provider has fallen into question afterwards a fallout between the company's founders and its majority shareholder.

The decision to sell comes afterwards years of acquisitions followed by a quick and steep decline in profitability, combined with frayed relations between the company's founding team and Dr. Patrick In the near future-Shiong, a multibillionaire doctor and businessman. He invested in KeyOn in hopes of using the company's telecom footprint as part of a "health information highway system" that he envisioned.

KeyOn was founded in 2002 in Las Vegas and became a openly traded entity in August 2008. Since at that time, the company grew from a tiny seller of telecommunications services in rural areas into a company providing wireless broadband, satellite video and Voice over Internet Protocol, or VoIP, services to rural markets.

Since its inception, the company has completed until further notice a dozen acquisitions, however the fast growth was met in recent years by mounting expenses and a subscriber base that wasn't growing fast enough to support the capital-intensive business of building and maintaining communications networks.

At one time, nevertheless, business was promising enough for KeyOn to secure a $10.2 million grant from the broadband initiatives program through the federal American Recovery and Reinvestment Act. Afterwards the award, KeyOn said it was planning to use the funds to build rural networks in rural Nevada that would bring broadband service to 100,000 residents. That project was expected to start in the first quarter of 2012.

The departures of Snyder

The departures of Snyder, Handell and Jason Lazar, another founder, were the result of a broken relationship with Before long-Shiong. According to people who spoke on the condition that their names not be used, Snyder, Handell and Lazar didn't agree with the long-term vision Before long-Shiong had for the business, and had issues with a pair of directors In the near future-Shiong appointed to KeyOn's board.

"Since our inception, we have failed to generate sufficient earnings to cover our operating expenses," the company said in the SEC filing. "If we are not able to raise additional capital, we will likely need to curtail or cease operations."

LoCascio said In the near future-Shiong decided to sell the company because of the capital-intensive nature of the telecommunications business and because the returns on his investment were not what he expected.