Covad Wins Line Sharing Arbitration with SBC and GTE in
Texas and Signs with SBC and GTE in California
Santa Clara, Calif. (June 7, 2000) - Covad Communications
(NASDAQ: COVD), the leading national broadband services provider utilizing
DSL (Digital Subscriber Line) technology, today announced that it has
signed or arbitrated interim line sharing agreements with every major
local exchange carrier from California to New York.
Covad also won a Texas Public Utilities Commission (PUC) arbitration
decision implementing line sharing in Texas. The decision was announced on
June 6th, the date by which the FCC ordered local providers to make line
sharing available to Covad and other CLECs.
Under the decision of the Texas Commission arbitrators, Southwestern
Bell may only charge Covad an interim recurring loop rate of $0.00. The
Texas decision is the first in the nation to agree with Covad and other
CLECs that the recurring cost of sharing a line is $0.00. GTE had already
agreed with Covad that the recurring loop rate should be $0.00.
In another national first, the Texas Commission ordered both companies
to provision line-shared loops within three days - a two-day improvement
over existing intervals in Texas. If the loops require special
conditioning to eliminate electronics that interfere with data
transmission, the provisioning time can expand to 10 days.
"We have worked hard to press the case for consumers and businesses,
and we have won significant results in Texas," said Dhruv Khanna,
executive vice president and general counsel for Covad. "The Texas
arbitrator's endorsement that the zero-cost loop rate is consistent with
the pro-competitive purpose of the Telecommunications Act sends an
important message to all phone companies still seeking to extract higher
long-term costs. In addition, we were pleased that the arbitrators agreed
with us that shared lines can be provisioned faster than the phone
companies claimed. That decision ultimately means that Texas consumers
will get their Covad DSL more quickly after they order our services."
Covad already has an interim line sharing agreement with SBC for
California, and is completing negotiations for similar agreements in Texas
and the remainder of SBC's territory. Covad also has interim line sharing
agreements with GTE in all of its major markets except Texas, where the
Commission's decision will form the basis of its interim agreement.
In November of 1999, the Federal Communications Commission (FCC)
required local incumbent phone companies to share existing phone lines
with competitive carriers, including Covad, by June 6, 2000. Line sharing
allows consumers to use their existing phone line for both normal phone
service provided by a local phone company and for high speed DSL data
access through another provider. The ruling is expected to open the door
to increased competition, expanded consumer choice, and streamlined
service delivery.
About Covad
Covad is the leading national broadband services
provider of high-speed Internet and network access utilizing Digital
Subscriber Line (DSL) technology. It offers DSL, IP and dial-up services
through Internet Service Providers, telecommunications carriers,
enterprises, affinity groups, PC OEMs and ASPs to small and medium-sized
businesses and home users. Covad services are currently available across
the United States in 74 of the top Metropolitan Statistical Areas (MSAs)
and are expected to be available in100 MSAs by the end of 2000. At that
time, Covad's network will reach more than 40 percent of all US homes and
45 percent of all US businesses. 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 statements regarding overall market demand
for the Company's services, the impact of line sharing on DSL installation
intervals and pricing, the ability to continue to build out central
offices with deployment of the Company's network in new and existing
regions, the ability to scale our business, anticipated decisions from
regulatory bodies, 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, dependence on incumbent local exchange carriers for collocation,
unbundled network elements and transport, ability to manage growth of our
operations and other risks and uncertainties detailed in the Company's
Securities and Exchange Commission filings.
