RealTime IT News

Covad/DSL.net Both Win With T-1 Deal

Covad Communications continues to diversify its business model, renting out T-1 POPs to DSL.net, Inc. , officials announced Wednesday.

The contract, which officials on both sides declined to elaborate on, lets DSL.net sell T-1 business-class lines to a greatly expanded customer base, thanks to Covad's nearly 600 POPs nationwide. It's been a busy week for DSL.net, which penned a deal Tuesday with Allegiance Telecom to resell T-1 lines at the carrier's 800 POPs.

Covad, on the other hand, has another revenue stream pumping funds into its accounts to avoid a repeat of the fiasco that led to its Chapter 11 bankruptcy last year and subsequent redemption.

The data competitive local exchange carrier (DLEC) relied almost solely on wholesale digital subscriber line (DSL) agreements with Internet service providers (ISPs), many which reneged on the number of lines it promised to sell. Covad officials, who had already paid for the lines to the incumbent LECs (ILECs), quickly got into financial trouble.

The contract is further expansion of DSL.net's diversification, also, branching out from strictly distance-limiting DSL and into T-1s. It's business service, dubbed NETgain-T, will launch next month.

"In combination with our prior T1 announcements, we will be able to offer a more complete set of T1 offerings, under our NETgain - T product umbrella, to an expanded set of service areas," said Keith Markley, DSL.net president and chief operating officer. "And, the beauty of T1 service is that we can offer businesses the Internet accessibility they require and the quality of service they demand, regardless of their distance from the central office."

Covad, fresh from escaping bankruptcy court, has quickly proven itself a money-maker in the competitive carrier industry. Last month, the company reported a net income of more than $858 million in the fourth quarter of 2001, a far cry from the net loss of nearly $1 billion a year prior.