Businesses and Consumers Win in Minnesota and Texas
Contact:
Allyson Willoughby Covad Public Relations (408)
855-7299 awilloug@covad.com
Christian Pinkston Alexander Ogilvy Public
Relations (202) 466-6860 cpinkston@alexanderogilvy.com
Covad signs historic line sharing agreement with US WEST
and wins major arbitration against SWBell
SANTA CLARA, Calif. (December 2, 1999) - Covad
Communications (Nasdaq: COVD), the leading national broadband
services provider utilizing Digital Subscriber Line (DSL)
technology, entered into a groundbreaking agreement with US WEST in
Minnesota that will, for the first time, implement line sharing
between broadband providers and incumbent telephone companies.
Farther south, Covad, along with Rhythms NetConnections, won an
arbitration case before the Texas Public Utilities Commission (PUC)
that will require Southwestern Bell Telephone Company to reduce the
fees that it charges for line preparation and conditioning.
The agreement with US WEST follows a September decision by the
Minnesota PUC asking US WEST to perform field tests to test the
feasibility of line sharing. While line sharing should be
implemented nation-wide next year, yesterday's agreement should
allow consumers in certain areas of Minnesota to experience cheaper
and more convenient broadband internet services from Covad and other
providers as early as January 10th, 2000.
The negotiated business agreement establishes interim prices for
shared lines, or loops. Covad and other competitive providers will
pay $6.05 per month for shared loops, which will be at least the
same price that US WEST will charge its data division, until the
Commission determines what the real costs are. The Commission agreed
to work quickly to ascertain the real cost-based charge for all
parties.
"US WEST's agreement to open up its lines to competition is a
tremendous win for the citizens of Minnesota," said Terry Moya,
Covad's senior vice president, External Affairs. "The Minnesota PUC
should be applauded for its willingness to allow all competitors a
fair opportunity to compete for broadband consumers."
The decision in Texas reduces a number of fees charged to
competitors that have prevented full broadband competition to
flourish. As a result of the Texas ruling, Covad will be better able
to serve its customers in the state on a number of fronts. The
ruling mandated the following:
- Covad is permitted to provide any DSL service of its choice.
- Reduced fees for preparing, or conditioning, phone lines for
DSL service, resulting in lower costs for consumers.
- Southwestern Bell must make operational support systems (OSS)
available, which will allow competitors like Covad to access the
systems and provide better, real-time assistance to customers.
"This decision --which favors full, fair competition in
the local communications marketplace--is precedent setting," said
Dhruv Khanna, executive vice president and general counsel of Covad.
"Texas is the trend setter on an issue that other states will
inevitably have to deal with in the near future."
This development caps a string of recent successes for Covad and
the DSL industry, including a recent decision by the FCC mandating
that incumbent phone companies share their existing telephone lines
with competitors.
About Covad Covad Communications is the leading
national broadband services provider of high-speed Internet and
network access utilizing Digital Subscriber Line (DSL) technology.
It offers DSL services through Internet Service Providers to small
and medium-sized businesses and home users. Covad services are
currently available across the United States in 56 of the top
Metropolitan Statistical Areas (MSAs) and will be available in 100
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. 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 statements
regarding overall demand for and acceptance of the Company's
services, the intention to deploy our network in new and existing
MSAs, the timing and breadth of coverage in each MSA, and the
implementation of the Texas PUC's decision and effect in other
states. 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 third parties to market and resell our 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,
transport and other facilities, ability to manage growth of our
operations, and the need to raise additional capital. For other
risks and uncertainties applicable to our business refer to the
Company's Securities and Exchange Commission filings.
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