AT&T Corp. said it will buy most of troubled digital-subscriber-line
provider NorthPoint Communications Inc.'s assets for the bargain price of $135
million after gaining approval from the United States Bankruptcy Court.
NorthPoint -- which has blamed most of its bankruptcy woes on a scrapped
merger with Verizon Communications -- launched a sales auction March 20 after
receiving a number of bids from potential suitors. NorthPoint filed for Chapter
11 bankruptcy in January.
The deal is expected to close within 60 days. At that time, AT&T will
absorb NorthPoint's national collocation arrangements and 'certain' network
equipment, systems and support software. Excluded from the deal are office
assets, customer contracts and NorthPoint's pending claims against Verizon, the
companies said.
Although NorthPoint has enough money to make it through the close, the
company said it will conserve cash in the interim by laying off more employees,
terminating DSL-customer connections and continuing asset liquidation.
That could affect High Speed
Access Corp., which has about 300 DSL lines installed in Denver;
Tampa, Fla.; Atlanta; Raleigh/Durham, N.C.; and San Antonio via a previous
reseller agreement with NorthPoint.
An HSA spokeswoman said the company is sending letters to those customers to
provide suggestions on alternative service providers before NorthPoint pulls the
plug. Transitioning those subscribers to MegaPath Networks Inc. or Telocity
Inc., which is being acquired by Hughes Electronics Corp., has been discussed,
she added.
HSA has already made preparations for NorthPoint's demise
with plans to acquire DSL equipment in some markets for cents on the dollar and
to sell DSL services directly to commercial customers.
