NorthPoint Communications Group, Inc. was a

competitive local exchange carrier A competitive local exchange carrier (CLEC), in the United States and Canada, is a telecommunications provider company (sometimes called a "carrier") competing with other, already established carriers, generally the incumbent local exchange carrier ...

focused on

data transmission Data transmission and data reception or, more broadly, data communication or digital communications is the transfer and reception of data in the form of a digital bitstream or a digitized analog signal transmitted over a point-to-point or ...

via

digital subscriber line Digital subscriber line (DSL; originally digital subscriber loop) is a family of technologies that are used to transmit digital data over telephone lines. In telecommunications marketing, the term DSL is widely understood to mean asymmetric dig ...

s. The company had relationships with

Microsoft Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washi ...

Tandy Corporation Tandy Corporation was an American family-owned leather goods company based in Fort Worth, Texas, United States. Tandy Leather was founded in 1919 as a leather supply store. By the end of the 1950s, under the tutelage of then-CEO Charles Tand ...

Intel Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California. It is the world's largest semiconductor chip manufacturer by revenue, and is one of the developers of the x86 ser ...

, Verio, Cable & Wireless, Frontier Corporation, Concentric Network,

ICG Communications Level 3 Communications was an American multinational telecommunications and Internet service provider company headquartered in Broomfield, Colorado. It ultimately became a part of CenturyLink (now Lumen Technologies), where Level 3 President ...

Enron Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. It was founded by Kenneth Lay in 1985 as a merger between Lay's Houston Natural Gas and InterNorth, both relatively small regional compani ...

, Network Plus, and

Netopia Farallon, later renamed Netopia, was a computer networking company headquartered in Berkeley, and subsequently Emeryville, California, that produced a wide variety of products including bridges, repeaters and switches, and in their later Netopia i ...

. The company had investments from

The Carlyle Group The Carlyle Group is a multinational private equity, alternative asset management and financial services corporation based in the United States with $376 billion of assets under management. It specializes in private equity, real assets, and ...

Accel Partners Accel, formerly known as Accel Partners, is an American venture capital firm. Accel works with startups in seed, early and growth-stage investments. The company has offices in Palo Alto, California and San Francisco, California, with additional ...

Benchmark Benchmark may refer to: Business and economics * Benchmarking, evaluating performance within organizations * Benchmark price * Benchmark (crude oil), oil-specific practices Science and technology * Benchmark (surveying), a point of known elevati ...

, and

Greylock Partners Greylock Partners is one of the oldest venture capital firms, founded in 1965, with committed capital of over $3.5 billion under management. The firm focuses on early-stage companies in the consumer, enterprise software and infrastructure as wel ...

History

The company was founded in 1997 by Michael W. Malaga and 5 other former executives of Metropolitan Fiber Systems. On May 5, 1999, during the

dot-com bubble The dot-com bubble (dot-com boom, tech bubble, or the Internet bubble) was a stock market bubble in the late 1990s, a period of massive growth in the use and adoption of the Internet. Between 1995 and its peak in March 2000, the Nasdaq Comp ...

, the company became a

public company A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange ( ...

via an

initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investme ...

in which it sold 15 million shares at $24 per share. Malaga, then 34 years old, was worth $300 million on paper. In September 2000,

Verizon Verizon Communications Inc., commonly known as Verizon, is an American multinational telecommunications conglomerate and a corporate component of the Dow Jones Industrial Average. The company is headquartered at 1095 Avenue of the Americas ...

agreed to acquire a 55% interest in the company and merge the companies' DSL businesses. In November 2000, as its customers failed to pay their bills, NorthPoint restated downwards its financial performance for the third quarter of 2000, lowering revenue from $30 million to $24 million. After the earnings restatement, Verizon terminated its acquisition agreement, claiming that a material adverse change had occurred. Northpoint sued Verizon to force it to complete the transaction. The lawsuit was settled out of court in July 2002, with Verizon agreeing to pay $175 million to Northpoint. NorthPoint stated that "it would cut its workforce by 19%, or 248 jobs, to lower expenses after the collapse of its merger with Verizon."

Bankruptcy

In January 2001, NorthPoint filed

bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debto ...

. Some internet service providers, which faced a disruption in service, blamed the banks for failing to work out a deal to save the company. In March 2001,

AT&T Corporation AT&T Corporation, originally the American Telephone and Telegraph Company, is the subsidiary of AT&T Inc. that provides voice, video, data, and Internet telecommunications and professional services to businesses, consumers, and government agen ...

acquired the assets of NorthPoint for $135 million in a liquidation.

References

{{Dot-com Bubble 1997 establishments in California 1999 initial public offerings Defunct companies based in the San Francisco Bay Area Defunct telecommunications companies of the United States Defunct networking companies Dot-com bubble AT&T subsidiaries Internet service providers of the United States