AT&T buys most NorthPoint assets, but not its customers

A U.S. bankruptcy court yesterday approved AT&T’s purchase of almost all NorthPoint Communications’ assets for $135 million, marking an end to the DSL provider’s boom-to-bust story.

“We basically got everything except the customers,” said an AT&T spokesman. “We did not choose to have the customers be part of this deal.”

NorthPoint’s assets will be utilized in AT&T Consumer’s residential DSL strategy, which was announced in conjunction with the restructuring of the telecommunications giant. For that reason, AT&T decided against buying the customer base, which featured more business customers than residential customers, the spokesman said.

Well known for its broadband cable efforts with consumers, AT&T previously has offered DSL service only to business customers, not residential users, the spokesman added. When asked if AT&T considered purchasing NorthPoint’s customer base and giving the NorthPoint business customers to the AT&T Business group, he said, “We thought it was in [AT&T’s] best interest not to.”

Included in the acquisition are NorthPoint’s co-location arrangements, certain network equipment, systems and support software, and related assets, according to a NorthPoint press release. The net purchase price will be applied in its entirety to satisfy part of the outstanding claims of the company’s senior, secured creditors.

Once a darling of Wall Street, NorthPoint declared bankruptcy on Jan. 16 after Verizon Communications last fall reneged on a deal to buy controlling interest of the DSL provider for $800 million. Subsequently, NorthPoint was de-listed by Nasdaq earlier this year. NorthPoint has since filed suit against Verizon, claiming the RBOC lacked sufficient legal grounds to nix the agreement.

In seeking bankruptcy protection, NorthPoint hoped to secure the financing needed to revive the company, but that effort failed, according to a letter from CEO Liz Fetter on NorthPoint’s Web site.

“As a result, the cessation of services to our customers and the complete shut down of our network is imminent,” the letter reads. “We urge you to take immediate action to secure alternate services for your needs.”