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RealTime IT News

WorldCom To Follow In AT&T's Shoes

Digital subscriber line (DSL) provider Rhythms NetConnections, in the middle of Chapter 11 bankruptcy proceedings and getting ready to shut down its service for good, could have a new lease on its afterlife with a reported bid by long-distance giant WorldCom.

Reuters claims it has documents which reveal WorldCom had placed un unspecified bid for "significant" portions of the troubled data competitive local exhcange carrier's (DLECs) network.

To date, Rhythms creditors have been forced by the Federal Communications Commission to keep the company's service running, in order to ensure a smooth transition for its customers.

The provider had originally planned on closing down Sept. 10 but the FCC, after listening to complaints brought up by equipment maker Cisco Systems Inc., ordered Rhythms to remain open until Monday at midnight. Cisco maintained its operations would have been seriously hindered by the shutdown, since as many as 8,500 of its employees used the Rhythms service.

The arrangement is eerily similar to the AT&T Broadband buy of NorthPoint Communications, which went out of business earlier this year.

NorthPoint, which filed for Chapter 7 bankrupty, closed down its network with little notice to customers, prompting a nationwide outcry of protest. Many in the industry consider the abrupt cessation of services as a contributor in the loss in confidence in the DSL industry.

AT&T Broadband later paid $135 million for NorthPoint assets, which consisted mainly of DSL access multiplexers (DSLAMs) at central offices (COs) nationwide.

It's good news for Rhythms creditors, who had hoped a similar scenario would occur so they wouldn't be stuck finding individual buyers for its nationwide network of routing equipment.

But it's continued bad news for Rhythms customers, who had hoped to avoid the fate suffered by NorthPoint customers earlier this year.

Rhythms officials were unavailabe for comment on the WorldCom buy or how many customers remained on its network.