NorthPoint fiasco sours small businesses to DSL

Web development firm Digital Positions relies on its Internet connection to keep its business running. Until two weeks ago, the Atlanta firm had been using a symmetrical DSL supplied by Verio as its Internet lifeline.

Unfortunately for Digital Positions, the wholesaler supplying DSL was NorthPoint Communications, which announced two weeks ago that it was shutting down its network after failing to find a company interested in acquiring its customers.

Digital Positions wasn't caught totally off-guard. The company had a back-up T-1 line in place, letting its IT staff switch over the IP addresses from DSL to the T-1 within a day. But the experience has frustrated Judith Campbell, Digital Positions' CTO.

"If these companies want to have any validity, they can't treat us like they have over the last couple of weeks," Campbell says.

Campbell isn't alone in feeling that NorthPoint and AT&T, the company that bought NorthPoint's assets, mishandled the shutting down of NorthPoint's network. NorthPoint had more than 100,000 customers - mostly small and midsize businesses, many of which took their complaints to Web forums.

DSLreports.com, a site dedicated to DSL news and DSL user experiences, set up a discussion board on the NorthPoint closure, which received thousands of posts in a matter of days. Many merely reported whether their NorthPoint connections were still up, others complained of the lack of alternative providers, while some debated whether switching to NorthPoint competitors Covad Communications and Rhythms NetConnections was a smart move, fearing they might soon share NorthPoint's fate.

Some disgruntled NorthPoint customers set up an online petition to AT&T, protesting their treatment. While AT&T bought most of NorthPoint's assets, including DSL access multiplexers, software and collocation space, the carrier had no interest in NorthPoint's customers. At last count the petition had more than 1,200 signatures.

Plenty of providers, including other DSL players and wireless broadband companies, are scrambling to win former NorthPoint customers. ISPs are rushing to switch their NorthPoint accounts to other networks as quickly as possible. Other ISPs - including former NorthPoint partners Excite@Home and Microsoft - have announced they're leaving the DSL business.

No matter where NorthPoint customers land, the company's demise has raised doubts in the small business community about the viability of DSL.

Digital Positions' Campbell says she's wary of going with Covad or Rhythms. That leaves BellSouth, which has not yet returned her calls.

Ultimately, Campbell says she may just go with a T-1 as her primary connection, saying, "It costs more, but at least you know it will be there."

Matthew Davis, an analyst with The Yankee Group, says some users will be afraid of getting burned by DSL again.

"The NorthPoint closure really hurts DSL," he says.

"A lot of small businesses are really going to be reluctant to go back, especially after they waited months for installation in the first place," he adds.

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