September 26, 2001 -- WorldCom (Nasdaq: WCOM) announced that it has filed in the U.S. Bankruptcy Court a bid for key Rhythms DSL assets. If approved by the Court, WorldCom would be able to continue, and enhance the delivery of business-class DSL services that are currently provided on the Rhythms network, which WorldCom's data and Internet customers have used for some time. According to WorldCom, the deal would provide full continuity in WorldCom's provision of its DSL products and would bolster WorldCom's portfolio of facilities-based broadband access methods.

Under the terms of the bid, WorldCom would purchase a portion of the Rhythms assets for $40 million, which would include so-called debtor-in-possession (DIP) financing sufficient to sustain Rhythms network operations for the portion of the network that WorldCom is acquiring. The acquired assets would include only facilities where WorldCom has a significant DSL customer base enabling WorldCom to even better support its IP-VPN and frame relay offerings. Financially, the transaction would not impact positive free cash flow.