FCC to prevent Rhythms shutdown

September 11, 2001 —

The Federal Communications Commission plans to prevent DSL (Digital Subscriber Line) service provider Rhythms Netconnections Inc. from discontinuing its broadband network service, the Wall Street Journal said on its Web site late Monday (9/10/01).

Rhythms planned to close down at 11:59 p.m. Tuesday night, but its fate will now be decided by U.S. Bankruptcy Judge Burton R. Lifland at a hearing on the issue Tuesday at 10 a.m. in New York, according to the Journal.

Rhythms filed for Chapter 11 bankruptcy status on Aug. 1, and has said that continuing to operate when faced with liquidation is a breach of trust towards creditors. Creditors have agreed that the service should be closed, but the FCC has said it is in the public interest to keep the broadband network operating as otherwise tens of thousands of subscribers would be left without high-speed Internet access, the Journal said.

In April NorthPoint Communications Group Inc., another DSL provider, filed for bankruptcy protection. Its customers -- other Internet service providers which bought bandwidth from the wholesaler -- faced an abrupt shutdown of their service before California regulators stepped in to prevent NorthPoint from shutting its network down without giving 30 days notice.

Rhythms, in Englewood, Colorado, can be reached at +1-303-476-4200 or at http://www.rhythms.com/.

ITworld.com