NorthPoint Communications

» see northpoint.net as it lived, on the wayback machine

~ the obituary ~

my broadband came from TTNet, and it came late, around 2006. before that it was dial-up on a Superonline or Turknet account and a modem that topped out at 56k. NorthPoint was the kind of company that made broadband happen, but on the other side of the world, in an American market i had no line into. it never touched me directly. it is here because it is a clean example of how the pipe underneath the internet can die while the internet keeps going.

NorthPoint started in 1997, founded by Michael Malaga and a handful of former Metropolitan Fiber Systems people. it went public in May 1999 at twenty-four dollars a share, and for a moment its founder was worth three hundred million dollars on paper. the business was wholesale DSL. NorthPoint did not sell to you directly, it built the data lines and rented them to internet providers who put their own name on the bill. in 1999 that looked like the future, and the money agreed.

in September 2000 Verizon agreed to take a fifty-five percent stake and fold its own DSL operation into NorthPoint. then NorthPoint restated a quarter of revenue downward, from thirty million to twenty-four, and in November Verizon called the deal off, citing a material adverse change. that was the end of it. the funding dried up and bankruptcy came in January 2001. on the twenty-second of March the company announced it was shutting the network down. AT&T bought the pieces for a hundred and thirty-five million. Verizon later paid a hundred and seventy-five million to settle the lawsuit over walking away.

~ the case file ~

~ the slide ~

what killed NorthPoint was not really its technology, it was that the whole thing depended on a bigger company keeping its word. wholesale DSL needed scale and patient money, and NorthPoint had neither once Verizon walked. the customers who did not pay their bills were a problem, sure, but the fatal move was a partner reading a bad quarter and deciding the contract had a door in it.

~ the long tail ~

the independent-ISP dream that NorthPoint served did not survive the crash either. what replaced it was the model we still live with, where the company that owns the wire also sells you the service and there is no wholesaler in the middle. NorthPoint was betting the wire and the service could be pulled apart and sold by different people. in the United States, mostly, they could not.

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