Rivals court former NorthPoint customers

Cypress Communications, which provides Internet access services to MTU (multiple tenant unit) buildings, announced Wednesday that it has signed agreements with more than 25 of NorthPoint's former business customers in the last two weeks.

But Cypress is just the latest company attempting to capitalize on NorthPoint's misfortune. The DSL (digital subscriber line) provider recently ran out of money to keep its high-speed network operating after selling its assets to AT&T in a bankruptcy court sale.

"I think it's a good opportunity because obviously those (former NorthPoint) customers need, want, demand high-speed Internet access," said Norm Bogen, a broadband industry analyst at Cahners In-Stat Group. "They're more likely to sign up again than the rest of the population. I suspect (competitors) will go after them, and they should."

The NorthPoint failure highlights the dynamics of the communications food chain. NorthPoint leased phone lines from the Baby Bells and provided them at wholesale prices to ISPs, who in turn provided them at retail prices to businesses and consumers. When NorthPoint went out of business, access to the lines vanished, touching off a chain reaction that has affected scores of related companies and thousands of customers.

Although some partner companies are feeling the pain of being left to explain the scenario to their customers while attempting to find an alternative provider, competitors are trying to make the most of their opportunity.

"We are well positioned to reap the benefits of the ongoing telecom sector shakeout, and we fully intend to capitalize upon these opportunities to further expand our customer base,'' Cypress Communications chief executive Frank Blount said in a statement.

Likewise, Covad Communications, a similar DSL wholesaler, said earlier this month that it had accepted orders from 10,000 former NorthPoint customers and had roughly 15,000 other pending orders.

Yipes Communications, a gigabit-speed Ethernet service provider targeting businesses, said Monday that it had established Internet service for businesses--former NorthPoint customers--in Houston and Chicago within three working days.

A boon for some competitors, the shutdown left many of NorthPoint's business customers without Internet access, and sent dozens of partner ISP companies scrambling for an alternative provider.

For example, Telocity, a consumer ISP, has offered unlimited free dial-up Net access to its customers affected by the NorthPoint shutdown.

Likewise, MegaPath Networks, a business-focused ISP, has secured deals with Rhythms NetConnections and New Edge Networks to move its NorthPoint customers to those alternative providers.