Covad to Jumpstart Micro-Businesses

Covad Communications has launched a program to help “very small” businesses by offering them a free year of DSL service.

The Santa Clara, Calif.-based data competitive local exchange carrier (DLEC) announced the Covad Broadband Entrepreneur Program on Monday. Grants include a year’s worth of free DSL service plus $500 in cash. To qualify, micro-businesses must have five or fewer employees, $35,000 or less cash on hand and no access to traditional bank loans. Arlington, Va.-based Association for Enterprise Opportunity (AEO), an association of organizations devoted to aiding microenterprises, has been tapped to administer the grants, which will target businesses owned by women, minorities and disabled people.

“The program gives us the opportunity to showcase the value of broadband and also to contribute to the community as well,” said Tom Thayer, Covad vice president.

The pro bono deal is quite an accomplishment considering Covad emerged from Chapter 11 Bankruptcy in 2001.

AEO executive director Bill Edwards said that, though on the small side, the free DSL and cash would be a big help to bootstrapping entrepreneurs.

“A lot of these small businesses are so thinly capitalized, and the individual entrepreneurs are so much on the margin that they would not be able to afford the high speed of connectivity. It’s not a huge amount, but it’s a fantastic injection of some capital into these enterprises.”

When evaluating applications for the grants, AEO said it will give preference to companies that can demonstrate that high-speed connectivity will directly benefit the business in ways beyond saving time online, for example, a manufacturer that wanted to expand its market by selling online.

“Broadband versus dialup is a no-brainer for us,” said Marc Kovner, IT director of Moving Comfort, a Chantilly, Va.-based manufacturer of women’s athletic apparel. Moving Comfort, a 25-person operation and Covad customer that was acquired by Russell Corp last year, is the kind of small business Covad hopes to benefit.

AEO and Covad said they will begin announcing grant winners in August, and expect to make 144 grants by the end of the year.

Editor’s note: A previous version of this story incorrectly identified the year of Covad’s emergence from Bankruptcy as 2002.

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