News Release

'New' NorthPoint to Bring Benefits of Broadband To Consumers, Businesses

Media contacts:

NorthPoint:
Caroline Howell, 415-365-6056

Verizon:
Joan Rasmussen, 212-395-2051

New York, August 8, 2000 -- Verizon Communications (NYSE:VZ) and NorthPoint (Nasdaq:NPNT) today announced a groundbreaking agreement to fundamentally change the dynamics of the broadband industry. The companies will merge their digital subscriber line (DSL) businesses to form a premier broadband communications company dedicated to accelerating the delivery of high-speed data services nationwide. The DSL businesses will be combined to create a "new" NorthPoint, positioning the company to rapidly scale its broadband service offerings and to deliver compelling benefits to consumers and businesses.

The merger will combine the companies' DSL networks, products, technology, strategic partnerships and management, creating a strong broadband competitor ideally positioned to unleash the Internet's full potential for delivering an unlimited array of content and applications to high-speed customers.

"This deal combines complementary assets -- Verizon's position in the consumer market and NorthPoint's presence with business customers -- to provide the scale to fuel growth and deliver the full benefits of high-speed connections," said Lawrence T. Babbio, Verizon vice chairman and president. "The new company will expand broadband choice for customers, providing a superior alternative to cable."

"NorthPoint and Verizon are changing the broadband services game," said Liz Fetter, NorthPoint president and CEO. "With this agreement, a new NorthPoint is created, one with unique and unmatched assets that will enable us to rapidly scale in an increasingly competitive broadband market. NorthPoint will be a stronger competitor against cable and other broadband service providers, delivering to customers the benefits that are always derived from competition: innovation, increased choice and better service."

Fetter will continue to lead NorthPoint as CEO after the merger. The new NorthPoint team will include management from both companies.

The new NorthPoint will include Verizon's existing DSL business, with its broadband network assets, and an $800 million cash investment by Verizon. Of the cash, $450 million will be used to fund the new NorthPoint's capital expenditures and operations, and NorthPoint shareholders will receive $350 million in cash or approximately $2.50 per share. The actual per share amount will be based on the number of outstanding NorthPoint shares and warrants as of the closing date of the transaction. NorthPoint shareholders also will receive one share in the new NorthPoint for each share held as of the closing date. Verizon will own 55 percent of the new NorthPoint and existing NorthPoint shareholders will own 45 percent. The merger agreement has been approved by the boards of both companies.

The new NorthPoint will use Verizon's $450 million cash investment to fund its network expansion and ongoing enhancements to its industry-leading service delivery, support systems and broadband product suite. The result will be greater broadband choice for consumers and businesses nationwide, enabling them to realize the full potential of the Internet.

Of the $450 million cash investment, Verizon will, subject to certain conditions, provide financing of up to $350 million to NorthPoint prior to closing. Upon completion of the merger, such financing would be converted into common stock in the new NorthPoint.

NorthPoint will gain additional resources to assist in the continued development of groundbreaking innovations designed to leverage its broadband network and create new growth opportunities. These innovations include voice, data and video offerings optimized for a DSL platform. Blast, for example, is NorthPoint's platform for delivering video and other high-bandwidth content to customers. Blast, which is currently in field trials in the San Francisco Bay area, will significantly enhance the broadband experience for consumers and businesses.

The New Broadband Leader

The "new" NorthPoint will become the national provider of choice for consumers, businesses and ISPs with the scale, scope and financial resources to aggressively expand availability of broadband services and applications. The combined operations of NorthPoint and Verizon expect to begin 2001 with the following assets:

• a broadband network, comprised of more than 3,000 unique operational central offices, passing approximately 63 million homes and businesses in 163 U.S. MSAs (metropolitan statistical areas);
• more than 600,000 DSL lines; wholesale relationships with Verizon Online, AOL, UUNET and Genuity, and strategic marketing relationships with RadioShack, Microsoft, Staples, Blockbuster and other industry leaders;
• approximately 3,000 employees dedicated to supporting the new NorthPoint's competitive, customer-focused strategy; and
• broadband ventures in Europe through VersaPoint and in Canada through NorthPoint Canada, addressing the rapidly emerging international DSL opportunity.

In addition, the agreement calls for Verizon's ISP, Verizon Online, to resell NorthPoint's DSL service nationwide. Verizon's DSL businesses currently include more than 1,700 central offices in 84 MSAs nationwide and NorthPoint's DSL businesses currently include more than 1,500 central offices in 99 MSAs.

The new NorthPoint board of directors will have three members from NorthPoint's existing board, three Verizon members and three independent members, appointed by Verizon. Lawrence T. Babbio, Verizon vice chairman and president, will serve as chairman of the board. Following the merger, the new company will trade as a separately listed public company on the NASDAQ exchange and will continue to report financial results. The new NorthPoint's financial results also will be consolidated into Verizon's financial results for financial reporting purposes.

NorthPoint's agreement with Verizon is subject to regulatory approvals and the approval of NorthPoint shareholders. Shareholders representing approximately 48 percent of the currently outstanding shares of NorthPoint have agreed to vote their shares in support of the merger. The companies anticipate completing the transaction by mid-2001.

Morgan Stanley Dean Witter acted as financial advisor to Verizon and Goldman Sachs & Co. acted as financial advisor to NorthPoint