California PUC tells NorthPoint to keep going--for now

(Telephony)The California Public Utilities Commission late Friday enjoined beleaguered NorthPoint Communications , which sold its assets to AT&T in a fire sale and subsequently pulled the plug on its network last week, from discontinuing service to its customers without first providing 30 days notice.

The effective 30-day stay of execution for its customers may be short-lived, however, as reports indicate that NorthPoint has no money to operate its network. Nevertheless, the PUC today will consider whether to add this matter to its agenda for discussion in public session.

Meanwhile, NorthPoint customers are left to cope as best they can.

“We have many customers whose service went out, and many of them are high-tech companies. One is focused on getting their next round of funding and their demo’s up on a Web server that’s serviced by a MegaPath/Northpoint line,” said Dan Foster, senior vice president of MegaPath Networks, a broadband services provider headquartered in Pleasanton, Calif.

Foster indicated his company anticipated this and developed a contingency plan to deal with it, only to have the bankruptcy courts dealing with NorthPoint’s dissolution tie their hands.

“We were handcuffed to the car that was going off the cliff because of the ‘asset-value’ of our customers and the inability to migrate them,” he explained. “It’s the conundrum of bankruptcy. There are a lot of good reasons why bankruptcy laws exist, but when you have businesses with mission-critical applications who are not allowed to migrate their lines … it’s the customer that loses here.

Foster said his company was one of several that formed a consortium that tried to provide the funding necessary to keep NorthPoint’s network operating, only to be rebuffed by the banks.

“We couldn’t reach an agreement with the banks, because they were more concerned with us chewing up the accounts receivable of NorthPoint rather than the network continuing to operate,” he said.

Riding to the rescue is Verizon, which will leave all NorthPoint DSL customer connections in service at no charge, for the time being. But a company spokesman was quick to point out that this gesture is but one piece of a very complicated puzzle.

“We’re maintaining the connection between the end-user’s wiring and the DSLAM,” he explained. “But that doesn’t mean customers will be able the surf the Web, because they still need to get out of the CO and onto the Net, and this is going to require other players. So, this is a piece-part solution.”

Foster would like state commissions to find a more complete solution to this sort of problem for the future, one that involves holding data providers to the same standards that are applied to their voice brethren.

“You just can’t cut voice off,” he reasons. “Mission-critical data applications should be treated in the same way.”