Agreement Triggered by FCC Decision Leads
to Line Sharing Throughout US WEST Territory
Santa Clara, Calif. (April 25, 2000) - Covad
Communications (NASDAQ: COVD), the leading national broadband
services provider utilizing DSL (Digital Subscriber Line)
technology, has entered into a regional agreement to share phone
lines with US WEST to provide high-speed broadband access in US
WEST's 13 states outside of Minnesota. In December 1999, Covad
entered into an agreement with US WEST to implement line sharing in
Minnesota. Covad was joined by other competitive carriers in the new
agreement, which is the first of its kind in the nation.
"Covad applauds the joint efforts of the competitive carriers and
US WEST, which have resulted in US WEST becoming the first incumbent
phone company to enter a written agreement to share lines on a
region wide basis," said Clay Deanhardt, senior counsel for Covad.
"This agreement proves that the FCC's line sharing mandate is
clearly executable by the incumbent local exchange carriers. Not
only will this agreement provide consumers with greater choice in
DSL service providers, but we also expect line sharing to result in
more competitive DSL pricing and faster installations."
Under the agreement, Covad and the other competitive carriers
have the ability to choose by May 1, 2000 one of two different
interim monthly loop cost options. The two interim options are
either a flat cost of $5.40, or a tiered cost of zero dollars per
month subject to a future increase to $8.25 based on the timing of
the proposed US WEST merger with Qwest Communications International
Inc. Ultimately, the final costs associated with line sharing will
be set by individual state Public Utility Commissions (PUCs) and all
interim costs will be adjusted retroactively. Covad believes that
the final cost for the shared lines should be zero dollars per
month, and is currently analyzing the interim cost options based on
the most recent information available regarding the timing of both
the proposed merger and the individual state cost proceedings.
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 Digital Subscriber Line data access through another
provider. The ruling helped to level the playing field by giving
consumers the choice of DSL providers without the burden of a
separate line, longer installation, and higher prices.
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 63 of
the top Metropolitan Statistical Areas (MSAs) and are expected to 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. 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 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.