Suluh Lukoskie
Public Relations
(408) 844-7754
slukoski@covad.com

Nick Kormeluk
VP Investor Relations
(408) 844-7457
InvestorRelations@covad.com

PUC Rules For DSL Competition in Bell Atlantic's Pennsylvania Region

SANTA CLARA, Calif. (August 26, 1999) - Covad Communications (Nasdaq: COVD), a leading broadband access and services provider, today praises a landmark decision by the Pennsylvania Public Utility Commission (PUC). The Pennsylvania PUC's decision to separate Bell Atlantic's retail business from its wholesale operations will ensure uniformity and open up competition for Digital Subscriber Line (DSL)-based services throughout Pennsylvania. This ruling will enable companies like Covad to provide innovative, broadband services.

"We are very encouraged to see real steps taken by the Pennsylvania PUC to level the playing field in telecommunications. Our business growth to date, and consumers ability to take advantage of Internet services, has been constrained by the incumbents on loops, collocation, and OSS access," said Dhruv Khanna, Covad's Executive Vice President and General Counsel. "Many PUCs like Pennsylvania are embracing the fact that competition and parity access are the keys to spurring the availability of broadband services to their customers."

The PUC's ruling will help make broadband services available throughout the state. As part of a "Global Telecommunications" proceeding, the Pennsylvania PUC approved a motion that will require that Bell Atlantic:

• Structurally separate its retail from its wholesale operations;
• Substantially cut unbundled loop rates for DSL-compatible loops;
• Establish flat and predictable rates for physical collocation; and
• Take steps to facilitate competitive DSL entry for consumers served by "remote terminal" devices, including options strongly advocated across the country by Covad, such as permitting competitive carriers to place equipment in remote terminals and share DSLAM equipment.

"This decision promotes competition throughout Pennsylvania and could be precedent-setting for the entire country," said Susan Jin Davis, Covad's Assistant General Counsel. "The PUC is working to establish a competitive DSL-friendly environment in Pennsylvania."

About Covad
Covad Communications is a leading broadband access and services provider of high-speed Internet and network access. It offers DSL services through Internet Service Providers to small and medium-sized businesses and home users, and direct to large enterprise customers. Covad services are currently available across the United States in the top Metropolitan Statistical Areas (MSAs.) Covad Communications and its affiliates, doing business as Covad Communications Company, are wholly owned subsidiaries of Covad Communications Group, Inc. (Nasdaq:COVD). Corporate headquarters is located at 2330 Central Expressway, Santa Clara, CA, 95050. Telephone: 1-888-GO-COVAD. Web Site: www.covad.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
The statements contained in this release, which are not historical facts may be deemed to contain forward-looking statements, including, but not limited to, deployment, scalability and integration of the Company's network in new and existing regions and the timing and breadth of coverage in each region. Actual results may differ materially from those anticipated in any forward-looking statements as a result of certain risks and uncertainties, including, without limitation, the Company's dependence on strategic third parties to market and resell its services, intense competition for the Company's service offerings, dependence on growth in demand for DSL-based services, availability of collocation space, loops and facilities, ability to manage and scale operations, and other risks and uncertainties detailed in the Company's Securities and Exchange Commission filings. The Company disclaims any obligation to update information contained in any forward-looking statement.