(FORTUNE Small Business) – For Brooks McLaren the timing could not have been worse. His post-production film company, Colorlab, was bracing for its spring season, when students from nearby NYU and Columbia University inundate the company's New York City office with their final projects. Processing the oeuvres-to-be is a multistep process that requires Colorlab's New York and Maryland facilities to rely on speedy DSL (short for digital subscriber line) service to access its Web-based project scheduling system. But on March 26, Colorlab's Internet connection died. "It was our busiest time of the year," says McLaren. "And it just faded out."

Actually, it was permanently disconnected. He and more than 100,000 other DSL subscribers were left hanging when their service provider, NorthPoint Communications of Emeryville, Calif., suddenly closed its digital doors. And as other providers are facing similar financial woes, more small business customers who've come to depend on fast and relatively inexpensive DSL connections may be in for a shock. Marketed as the ideal broadband solution for small businesses, DSL will likely become more expensive and frustrating as its providers struggle to survive an upcoming round of bankruptcies, mergers, and competition from phone companies.

The end result? "In the near term, this is going to mean price increases," says Jay Pultz, networking research director at Gartner Inc., a technology-research firm based in Stamford, Conn. In addition, customers may find themselves being shuffled from one service provider to the next as their overextended ISPs go under. And NorthPoint's closure isn't likely to be the last. Its erstwhile competitors, Rhythms NetConnections and Covad Communications, are struggling. With its stock trading at just 36 cents a share late last March, Rhythms may lose its listing on the Nasdaq exchange. And Covad, with 319,000 subscribers, recently scrapped plans for expansion.

As many of the nation's 2.4 million DSL subscribers can tell you, getting service has never been easy to begin with. That's due in part to the industry's convoluted business model. Wholesalers like NorthPoint typically sold DSL service to smaller Internet service providers, who in turn sold it to business and home users. Getting hooked up often requires coordination between parties with conflicting interests. "We had to have three companies in here," says McLaren, who waited for four months while his ISP, Cable & Wireless, NorthPoint, and the local phone company struggled to find an installation time that would work for all of them.

So the shutdown of McLaren's DSL service just six weeks after it was installed added insult to injury. "It's a step backward for us," says McLaren, who, without his online project tracking system, must spend his days making time-consuming phone calls to get status reports on behalf of his clients. "It's like someone shut our heat and hot water off in the middle of winter," says Arvin Talwar, who estimates that his Chicago consulting firm, Catalyst Consulting Group, will suffer losses "in the six figures" as a result of NorthPoint's collapse.

But despite the complaints, DSL has become a must-have for many small businesses. As a technology, DSL works great. It runs over existing phone wires unlike cable modem systems, which can slow to a crawl during local peak usage times. And while DSL service packages designed for businesses can cost up to $400 a month, that's still a lot cheaper than industrial strength T1 lines, which run about $1,200 a month.

There are things you can do to keep from being disconnected. Websites such as www.dslreports.com and www.cnet.com feature customer reviews and price comparisons. Also, find out whose DSL network your ISP uses. Pultz suggests asking your local provider what they'll do if the wholesaler pulls the plug and have them include their backup plan in your contract. But this measure may not protect you completely if your ISP goes under. "You probably ought to have a slower speed option--dial-up or ISDN--in your back pocket," says Pultz.

McLaren, meanwhile, would rather have nothing to do with another ISP. "We want to make sure whoever we go with is going to be up for more than six weeks," he says.

--SASHA SMITH