Spectrum Information Technologies

Spectrum Information Technologies, Inc.

Company type	Public
Industry	Telecommunications, Networking hardware
Predecessor	Spectrum Cellular Communications Corporation
Founded	1983 (1983)
Founder	Dana C. Verrill, Robert C. Adair, Patrick A. Mayben
Defunct	2006 (2006)
Fate	Liquidation of assets
Headquarters	Dallas (1983–1992), Long Island, New York (1992–2006) , United States
Key people	Dana C. Verrill (founder, president and CEO), Peter Caserta (CEO), John Sculley (CEO)
Products	Cellular modems (Bridge, Span), Networking hardware
Number of employees	21 (1985)

Spectrum Information Technologies, Inc. (SITI), previously known as Spectrum Cellular Communications Corporation (SPCL), operated as a U.S.-based telecommunications and networking hardware firm from 1983 until 2006. Recognized as a trailblazer in mobile broadband, the company was the first to harness cellular telephone networks for computer networking purposes. Their 1984 innovation, the Bridge, marked the debut of the first commercially available cellular modem. Despite its pioneering advancements, Spectrum consistently struggled to attain profitability. Initially based in Dallas, Texas, the company moved its headquarters to Long Island, New York, in 1992.

During the mid-1990s, Spectrum became embroiled in multiple securities fraud allegations. The firm attracted media attention in 1993 by appointing John Sculley, former CEO of Apple, who departed after a brief four-month tenure. In 1999, Spectrum underwent a rebranding to become SITI-Sites.com, Inc. and redirected its business strategy toward e-commerce. By November 2006, shareholders consented to liquidate the company's assets.

Establishment (1983–1985)

Spectrum Information Technologies, Inc. originated in late 1983 under the name Spectrum Cellular Communications Corporation, founded by Dana C. Verrill, Robert C. Adair, and Patrick A. Mayben. Verrill took on the roles of president and CEO as the principal founder. The founding team secured $50,000 in initial capital to incorporate the company in Dallas, Texas. Less than a year later, Spectrum went public with an IPO filing on Nasdaq in September 1984.

Emerging soon after the U.S. introduction of the Advanced Mobile Phone System (AMPS), Spectrum leveraged this new cellular infrastructure to create specialized cellular modems aimed at ensuring stable mobile data transmission. At that time, mobile phones used as modems suffered from frequent disconnections during cell handoffs, impairing serial data communication reliability.

Spectrum's early offerings included the Bridge and Span devices, released in June 1984 and August 1985 respectively. The Bridge was notable as the first commercially launched cellular modem designed to link a computer’s RS-232 serial interface with a mobile phone transceiver. It incorporated advanced error detection and correction mechanisms that buffered data during signal interruptions caused by handoffs to minimize loss. Complementing this product line, the Span targeted fixed locations such as homes or businesses and online service providers.

Production of both devices was outsourced to Electronic Assembly Corporation located in Neenah, Wisconsin. The initial models operated at 300 baud using the Bell 103 standard; later iterations increased transmission speeds to 1,200 baud by 1986 and further to 2,400 baud by 1989, reflecting continuous enhancements aligned with market demand for faster mobile data rates.

Expansion Phase (1985–1988)

The company reported financial losses during fiscal years 1984 and 1985. A pivotal agreement was signed in August 1985 with Ameritech Cellular, enabling Spectrum to resell its Bridge and Span modems through Ameritech’s channels. By late 1985, Spectrum had established a partnership with CompuServe, then the largest online service provider in the U.S., deploying Span units across five of CompuServe’s data centers by February 1986. At that time, with mobile phone users reaching approximately 250,000 nationwide, Spectrum had installed around 1,200 cellular modems predominantly on a trial basis; their Dallas office employed 21 personnel.

Following 1986, demand for Spectrum’s cellular modem technology grew rapidly as it collaborated with numerous cellular carriers to install equipment at MSTO locations to enhance service offerings for customers. By 1989, Spectrum’s technology was adopted by 54 cellular providers and 43 online service companies. These collaborations generated revenue streams and facilitated improvements in Spectrum’s error detection and correction algorithms. In 1987, Spectrum obtained its first patent covering these algorithms; by 1988 these protocols were standardized under SPCL and licensed to other manufacturers. This technology was integrated into the ITC 286 CAT—the first laptop equipped with an embedded cellular modem—introduced late that year by Dallas-based Intelligence Technology Corporation.

While telecommunications operators readily embraced Spectrum’s innovations, computer hardware resellers initially exhibited reluctance due to their perception of cellular systems primarily as voice communication tools rather than data transmission solutions. To bolster reseller alliances and broaden its market presence, Spectrum acquired USSI—a Dallas-based reseller specializing in hardware and software—in July 1987. This acquisition was followed by purchasing Dealer Service Business Systems in March 1989, a system integrator focused on supplying laptops for field sales personnel headquartered in Moline, Illinois.

Near-bankruptcy and external investment (1988–1993)

In March 1988, investors from California purchased a controlling 50.01% interest in Spectrum Cellular. By September 1989, the company was rebranded as Spectrum Information Technologies and became a fully owned subsidiary. By 1990, more than 12,000 Spectrum modems were operational across North America.

Although the business expanded, it had yet to generate profits and faced the threat of bankruptcy. In 1991, Spectrum initiated a second initial public offering and appointed Peter Caserta from the Caserta Group, an investment firm located in Manhasset, New York, to its board. Despite internal disagreements regarding Caserta’s objectives, he was named CEO while Verrill was reassigned to chairman. In 1992, Caserta moved the headquarters from Dallas to Manhasset to be closer to his investment firm. He incurred substantial expenses including $500,000 on office refurbishments, $50,000 on a speedboat, acquisition of a company Mercedes-Benz, doubled his $250,000 salary, and obtained options for two million shares. Verrill was subsequently demoted from chairman but remained on the board and led Spectrum International’s efforts to expand hardware sales in Europe.

During the mid-1990s, Spectrum became embroiled in controversies related to alleged securities fraud. In December 1992, the company inaccurately reported owning over 200 patents when it held only three with additional patents pending. After signing a patent licensing deal with AT&T in May 1993, Spectrum’s stock briefly surged to $11.75 on Nasdaq following Caserta’s claims of "hundreds of millions" in revenue—assertions AT&T disputed, valuing them at only a few million dollars. Skepticism expressed by CNBC analyst Dan Dorfman triggered a sell-off that reduced the stock price to $6 by May 21. That same month, the U.S. Securities and Exchange Commission along with the U.S. Attorney for the Eastern District of New York launched an investigation into suspected stock manipulation; however, Spectrum delayed informing shareholders of this probe until January 1994.

Sculley’s brief leadership, downfall, and strategic shift (1993–2006)

On October 18, 1993, Spectrum captured attention by appointing John Sculley—former Apple Computer CEO from 1983 to 1993—as its new chief executive officer. Sculley had resigned from Apple only five days earlier. He praised Spectrum as "a little gem" and forecasted that wireless communications would eclipse personal computers as the primary innovation driver in the coming decade. Despite assurances that legal and technical experts had reviewed Spectrum’s patents and regulatory concerns, Sculley acknowledged having limited awareness of the company’s previous Nasdaq delisting and ongoing SEC investigations. His arrival triggered leadership changes including Caserta’s demotion and Verrill’s resignation.

Sculley’s leadership lasted just four months; on February 7, 1994, he resigned and filed a $10-million lawsuit against Caserta accusing him of concealing financial difficulties such as losses and shareholder lawsuits. Spectrum responded with a breach of contract counterclaim. These legal disputes were eventually resolved out of court. In October 1996, Caserta received a 27-month prison sentence for conspiracy to commit fraud involving start-up companies. The scandal tarnished Sculley’s reputation; he later described the episode as "terribly embarrassing" but subsequently made successful investments in other technology ventures.

Following Sculley’s exit, Spectrum failed to reach profitability and filed for Chapter 11 bankruptcy protection in January 1995. The company reemerged from bankruptcy in August 1996 but continued operating at a loss. In 1999, Spectrum abandoned its networking hardware business and shifted focus to e-commerce under the new name SITI-Sites.com, Inc. By November 2006, shareholders approved liquidation of assets and suspension of trading activities; nonetheless, the company continued as a non-operating entity collecting patent royalties and pursuing infringement litigation.

See also

• History of mobile phones
• Tethering