NorthPoint Demise Won't Impact Broadband Strategy

NorthPoint, the sole provider of high-speed digital subscriber line (DSL) service for MSN Internet Access, has gone out of business and sold its assets to AT&T’s consumer division, leaving about 7,000 MSN HighSpeed customers without DSL service. But the troubles of NorthPoint and other broadband access providers represent only a minor setback to Microsoft’s long-term broadband strategy.

MSN Loses DSL Service

Microsoft has offered its DSL customers six months of free dial-up service, a $25 eShop gift certificate, and a full refund on the $150 modem used for the service to make up for the inconvenience caused by NorthPoint’s demise.

No public information was available on how or when Microsoft would restore DSL service to these customers. But MSN Internet Access and Customer Support Vice President Ted Kummert has said the company will “focus on working with leading broadband providers who are less vulnerable to fluctuations in the market,” suggesting that the company will probably only consider providers with significant financial and infrastructure resources, such as AT&T (in which Microsoft has a large investment). Small DSL resellers like Rhythms NetConnections (which has also received funding from Microsoft) and Covad Communications are probably out of the running. MSN continues to offer high-speed access through Starband, a satellite-based joint venture with EchoStar and Gilat Satellite Networks.