AT&T BUYS NORTHPOINT ASSETS
AT&T said Fri. its $135 million deal to acquire assets of NorthPoint Communications would help it move more quickly into consumer DSL market. Purchase included virtually all assets including colocation agreements, network equipment, systems and support software, 2 leased buildings in Emeryville, Cal. Not included were customer contracts, and Covad, for one, quickly announced offer aimed at signing up end users served by NorthPoint ISPs.
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Transaction approved late Thurs. by U.S. Bankruptcy Court, San Francisco, is expected to close in less than 60 days. Deal marks end of NorthPoint, which started out on 1997 as darling of Wall St. but sank to filing for bankruptcy protection in Jan. NorthPoint has 950 employees, and AT&T said it expected to hire some but wouldn’t be more specific. NorthPoint spokesman said company expected to be fully liquidated in 30-60 days. Company said closing of asset sale would result in “work force reductions and the imminent termination of network services to customers.”
Shortly after sale was announced, competitor Covad began targeting small-to-medium business end-user customers currently served by NorthPoint ISPs with offers of free installation and DSL modem trade-in. Covad promotion, available through May 1, offers 2 participation levels: (1) For end users served by NorthPoint ISP that also is Covad ISP, Covad will waive installation charge to ISP. Once Covad service is installed, customers can participate in modem trade-in program. (2) Customers with NorthPoint-only ISPs are eligible to participate only in modem trade-in program and will be switched to Covad ISP.
Telocity announced Fri. it already had began switching customers served by NorthPoint DSL connections to other carriers. Telocity, residential broadband service provider, works with 5 last mile carriers nationwide.