The broadband service reseller entered into a regional agreement to share phone lines with BellSouth (BLS) and provide DSL access throughout the telecom company's nine-state territory.

Covad (COVD) is the first competitive carrier to reach a line-sharing agreement with BellSouth. Earlier in the week Covad signed a similar deal with US WEST (USW).

Catherine Boone, Covad regional counsel for the territory, said Covad seeks a speedy implementation of line sharing throughout the South.

"The primary benefit of this agreement is a quicker, easier DSL installation for consumers at a more competitive rate and with a greater choice of providers," Boone said. "Another benefit of both the BellSouth and US WEST contracts is that we have stronger footing in our negotiations and arbitrations with the remaining incumbent carriers."

Under the agreement, Covad has locked in an interim monthly loop rate of $6 per line. Ultimately, the final costs associated with line sharing will be set by individual state Public Utility Commissions and interim costs will be adjusted retroactively.

Covad estimates that the final cost for the shared lines should be zero dollars each month. The agreement will allow Covad to begin ordering line-shared loops early in June and anticipates full implementation throughout BellSouth's territory by the end of July.

The deal marks another win for the Federal Communications Commission November 1999 ruling that requires local incumbent phone companies share existing phone lines with competitive carriers.

Although Covad has experienced service pitfalls in its rush to resell DSL services nationwide to business and Internet Service Providers, the Bell South deal firmly establishes its broadband industry leading position in the high-speed Internet access arena.

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BellSouth Wednesday entered into a deal with SBC Communications Inc. (SBC) to create a new company from their combined wireless assets. BellSouth has focused on its wireless connectivity more so than its wired services because the company faces an uphill batter to rev its copper lines to carry DSL high-speed access. As much as 65 percent of BellSouth's central offices need to be overhauled in order to facilitate DSL access to the Internet.

According to a 1999 U.S. Commerce Department study, North Carolina is BellSouth's worst case scenario for Internet access. The state ranks 46th in the nation for Internet services, due in part to the geographical complexities of offering wired line services to the area.

BellSouth, faces its greatest challenge to accelerate deployment of basic local phone services in North Carolina, let alone high-speed Internet access. Currently less than 20 percent of the households in North Carolina have Internet access.

North Carolina Governor Jim Hunt Wednesday called upon the state's three major communications companies to work with the state to bring affordable, high speed Internet access to all North Carolinians within three years.

The agreement between BellSouth, Sprint Corp. and GTE is a first in the U.S. The initiative is designed to provide rural parts of the state with Internet service at no cost while providing access speeds comparable to the state's urban areas.

Under the agreement, BellSouth, Sprint (FON) and GTE (GTE) plan to work with Internet service providers, telephone cooperatives, and the state government to provide affordable, high-speed Internet access to all areas of the North Carolina within three years. In addition, the communications companies agreed provide local dial-up Internet access from every telephone exchange within one year.