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AT&T Acquires NorthPoint's Assets

AT&T's efforts to offer high-speed Internet service could get a boost now that the phone giant has the go-ahead to buy the assets of bankrupt DSL provider NorthPoint Communications.

The transaction was approved by a California bankruptcy court and is valued at about $135 million. It includes substantially all the assets of Emeryville, Calif.-based NorthPoint, which filed for Chapter 11 bankruptcy protection in January of this year.

AT&T said it would acquire NorthPoint's co-locations nationwide, network equipment, systems and support software and related assets, as well as two leased buildings in Emeryville. The transaction is expected to close with two months.

Robert Aquilina, co-president of AT&T's consumer division, said the deal would help the company move aggressively to roll out high-speed Internet access and DSL services to consumers and businesses. The hubs and other assets it is getting should also help the company build new technologies for local and long distance calling as well as broadband services and virtual private networks.

AT&T said it was delighted to be acquiring NorthPoint's DSL assets, with good reason. The venerable telecommunications giant is undergoing a major restructuring to find new business models and revenue streams as its long-distance business erodes from price competition and Internet technologies.

Still left to resolve for NorthPoint, however, is a lawsuit it filed against Verizon, after the phone company decided not to go through with its plans to buy a stake in NorthPoint valued at about $800 million. Shortly after the decision in December, other financing commitments for NorthPoint fell through and it filed for bankruptcy protection about a month later.