DirecTV Inc. parent Hughes Electronics Corp. said Tuesday that it has closed
its acquisition of digital-subscriber-line provider Telocity Inc.
Hughes wants to be able to market both DirecTV television and a choice of
high-speed-data services from Telocity or Hughes Network Systems' DirecPC
Hughes said about 94 percent of Telocity's shares had been tendered by the
close of business Monday. Shares of Telocity's common stock will cease to exist
at the close of business Tuesday. Shareholders that did not tender their shares
will receive $2.15 per share.
Telocity serves customers in 150 metropolitan markets through partnerships
with last-mile DSL providers, including regional Bell operating companies and
competitive local-exchange carriers.
Among its last-mile providers had been NorthPoint Communications Inc., which
plans to shut down its DSL service. Telocity has assured customers that it will
do its best to find alternative last-mile providers. In addition, the company
won't bill for service missed, and it will offer a free month's service in the
event of an interruption in service.
A DSL option can help DirecTV to compete more directly with cable operators
that are aggressively deploying high-speed cable modems and a two-way
interactive pipe for digital-cable television.
Making high-speed Internet access available to all homes across all DirecTV
markets is something the company must do for competitive reasons, DirecTV global
chairman Eddy Hartenstein said at 'The Big Picture' conference in New York
Tuesday. He added that DirecTV plans to become a whole-house provider of
services to its customers.
At least initially, the DSL service will continue to be branded Telocity. The
subsidiary's headquarters will continue to be located in Cupertino,
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