MFN Loses Large Customer

Metromedia Fiber Network Inc. lost one of its largest hosting customers to AT&T Corp. this week, but company officials said that the bankrupt metro area network provider is still delivering uninterrupted service to its customers with no intention of shutting down.

The Web sites of CNET Networks Inc. will be dark July 5 through July 7 as the company moves its servers to a data center operated by AT&T, CNET said in a press release today. CNET said that the move from one hosting provider to another was required, but a spokeswoman for MFN said that is not the case.

"We are migrating customers who choose to stay with us to our San Jose facilities," said Kara Carbone, spokeswoman for MFN. "The San Jose facilities are solid, and our customers havent had any service interruption at all."

As part of its reorganization plan to emerge from Chapter 11 bankruptcy protection, which MFN filed for May 20, the hosting provider decided to close its data centers in San Francisco and Los Angeles. MFN is based in White Plains, N.Y.

"You have to make tough decisions when youre reorganizing," Carbone said. "I dont believe [the San Francisco and L.A. facilities] were profitable. They were not our largest data centers by any means."

MFN hosted approximately 16 customers in Los Angeles and approximately 50 in San Francisco, and company officials spoke with each customer regarding the migration to San Jose, Carbone said.

In mid-June, MFN said that the U.S. Securities and Exchange Commission opened an investigation into the companys accounting practices. MFN earlier had announced that it would restate its operating results for each quarter in 2001 because of revenue/sales credit recognition, timing of expense recognition, and non-cash lease accounting and purchase accounting issues.