Covad Wraps Up Line Sharing Deals

Covad Communications Inc. Wednesday
announced that it has signed or arbitrated interim line sharing agreements
with every major exchange carrier from California to New York.

In compliance with the Federal Communication
Commissions November
1999 Line Sharing Order, Covad
won a Texas Public Utilities
arbitration decision again SBC
Communications Inc.
subsidiary Southwestern Bell Telephone Co. to
implement line sharing in parts of Texas.

The decision was announced late Tuesday, on the date by which the FCC
ordered local providers to make line sharing available to Covad and other
competitive local exchange carriers.

Under the decision of the Texas Commission arbitrators, Southwestern Bell
may only charge Covad an interim recurring loop rate of
$0.00 until long-term pricing can be negotiated.

The Texas decision is the first in the nation to agree with Covad and other
CLECs that the recurring cost of sharing a line is nothing, because the
system is already in place to provide plain old telephone service and does
not cost the telecom anything to share the local loop.

GTE Corp. had already agreed with Covad
that the recurring loop rate should be zero dollars.

The loop rate may cost Covad nothing due to the interim agreements, but
pricing for other unbundled network elements are part of the line sharing
negotiations. The UNEs are billed to CLECs as a monthly service fee for
maintenance and other services after a one-time set up fee is negotiated.

The Texas Commission also ordered both companies to provision line-shared
loops within three days, a two-day improvement over existing intervals in
Texas. If the loops require special conditioning to eliminate interference
with data transmission, the provisioning time can expand to 10 days.

Dhruv Khanna, Covad executive vice president and general counsel, said it
worked hard to press the case for consumers and businesses, and we have won
significant results in Texas.

“The Texas arbitrator’s endorsement that the zero-cost loop rate is
consistent with the pro-competitive purpose of the Telecommunications Act
sends an important message to all phone companies still seeking to extract
higher long-term costs,” Khanna said. “We were pleased that the arbitrators
agreed with us that shared lines can be provisioned faster than the phone
companies claimed. That decision ultimately means that Texas consumers will
get their Covad DSL more quickly after they order our services.”

Covad already has an interim line sharing agreement with SBC for California, and is completing negotiations for similar
agreements in Texas and the remainder of SBC’s territory. Covad also has
interim line sharing agreements with GTE in all of its
major markets except Texas, where the Commission’s decision will form the
basis of its interim agreement.

In related news, Covad Wednesday fired up DSL services to Charlotte and
Greensboro, N.C., as well as in Memphis and Nashville, TN.

Covad’s extension of DSL services to the area is the result of implementing
the FCC’s line sharing order with Bell
South Corp.

Tom Wagner, Covad president and general manager, said all systems were go
to begin converting dial-up subscribers to its high-speed DSL services in
the area.

“Our aggressive expansion into the Bell South region enables users in these
growing, tech-savvy areas to unleash the full power of the Internet,”
Wagner said. “With the high level of Internet users already in place in
these four cities, we feel strongly that there

will be a high rate of
conversion from dial-up Internet access to DSL.”

Covad DSL service will ultimately be made available to more than 37,000
business and 321,000 households in Charlotte, 28,000 businesses and
242,000 households in Greensboro, 29,000 businesses and 275,000 households
in Memphis, and 35,000 businesses and 306,000 households in Nashville.

Covad sells DSL services through both local and national Internet service
providers nationwide.

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