Bankrupt NorthPoint Begins DSL Service Shutdown for Thousands

After a last-ditch fund-raising effort fell apart, bankrupt NorthPoint Communications Inc. late Wednesday began shutting down its high-speed Internet network, cutting off service to tens of thousands of customers nationwide.

Emeryville, Calif.-based NorthPoint and its bankers rejected an offer from a coalition of Internet service providers to fund NorthPoint’s network operations until users could be shifted to other carriers.

More than 100,000 U.S. customers--including about 30,000 in California--connect to the Internet using fast-access lines operated by NorthPoint and sold through Internet service providers such as MSN.net, Telocity Inc., and MegaPath Networks Inc. and through phone carriers such as XO Communications Inc.

NorthPoint had become one of the nation’s largest wholesale providers of Internet connections via digital subscriber line technology, or DSL, which carries data signals over standard copper phone lines at speeds up to 25 times faster than a typical dial-up modem.

The shutdown started late Wednesday with customers in California, but the entire network was expected to be inoperative by the end of Thursday.

Meanwhile, XO Communications and the California ISP Assn. filed separate complaints against NorthPoint with the California Public Utilities Commission seeking regulatory intervention. The PUC will hold a hearing on the matter today, but their powers may be limited because NorthPoint’s DSL service was sold under federal tariffs.

NorthPoint, which filed for bankruptcy in January, last week sold its equipment and some other physical assets to AT&T; Corp.