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NorthPoint sale leaves ISPs in DSL lurch

NorthPoint Communications' decision to sell part of its assets to AT&T is about to leave high-speed Internet subscribers around the country stranded without a Net connection.

NorthPoint Communications' decision to sell part of its assets to AT&T is about to leave high-speed Internet subscribers around the country stranded without a connection to the Net.

NorthPoint was one of several companies that served as a wholesaler to other ISPs, providing them with DSL (digital subscriber line) Internet connections that could in turn be sold to individuals. But Thursday, in conjunction with news that it was selling most of its assets to AT&T, the company posted a warning at its site that the "the complete shutdown of (its) network is imminent."

Now NorthPoint's ISP customers are scrambling to find a replacement, and telling their own subscribers that their days of speedy connections are over, at least for now.

"I regret to inform you that MSN will soon be temporarily unable to provide you with MSN HighSpeed DSL service," read a letter sent to DSL subscribers Friday, signed by company Vice President Ted Kummert. Blaming the outage on NorthPoint's woes, Microsoft said it would be more careful in the future.

"Moving forward, we will focus on working with leading broadband providers who are less vulnerable to fluctuations in the market," Kummert said.

Other ISPs, including Telocity, Verio and others are in the same boat, sending letters to their subscribers apologizing for likely service interruptions.

The announcement of AT&T's $135 million purchase of much of NorthPoint's assets came Thursday. The purchase was made by Ma Bell's consumer division, and the company has said it will use the assets to offer local telephone service as well as high-speed Net connections.

An AT&T spokesman said that NorthPoint's customer base did not fit into AT&T's business model, however. "They were a wholesale company," spokesman Mark Siegel said. "That's something we're not interested in."

Most of the ISPs affected are offering their subscribers some credits or interim dial-up connections while a new high-speed access provider is found.

Verio said it would give customers a 60-day dial-up account. Telocity told its users it would take four weeks to eight weeks to transfer service but that customers would get a free month of service after it resumes.

Microsoft said it would provide six months of free dial-up Net service, a $25 gift certificate at MSN's shopping channel, and a refund on the $149 modem used for the service.

Several ISPs that used other wholesalers in addition to Northpoint are switching some of their customers over fairly painlessly. Telocity, for example, said some of its NorthPoint subscribers would experience only about an hour of downtime.

Covad Communications, a former competitor to NorthPoint that is having its own financial troubles, is offering a "Covad Safety Net Promotion," waiving installation fees for customers of ISPs like Telocity that can switch customers over easily. Covad is also providing a rebate on new modems for NorthPoint subscribers who send in their old DSL modems.

NorthPoint said Thursday it was looking for funding from its ISP partners to support service while a new provider could be found, but that service would be turned off if that funding fell through.

The news of the shutdown elicited predictably bitter words among DSL users.

"I'm extremely disappointed in Telocity, AT&T and the bankruptcy judge for allowing the interruption in service," wrote Darrel Ng, a Telocity subscriber, in an e-mail. "Internet access should be considered a utility these days, like water, power and telephone service. In the meantime, I have already scheduled an appointment for the cable company to come and install a cable modem."