Covad, the Comeback Kid

With bandwidth comes bandits, claims the Computer Security Institute and the Federal Bureau of Investigations in a 2001 security survey aimed at small businesses. The study revealed that 85 percent of those surveyed had experienced network banditos, and 64 percent of those breaches had resulted in financial loss.

Taking those statistics to heart, Covad Communications , the Santa Clara, Calif.-based comeback kid that bounced back from a near miss with bankruptcy in December 2001, today released its first new products of the year designed to help small businesses thwart Internet theft and protect their networks from costly viruses.

A provider of broadband service to more than 40 million homes and businesses throughout the U.S, Covad released its new TeleDefendSM Firewall and TeleDefendSM VPN/Firewall supported by the company’s security operations center that monitors business locations for signs of information breaches for always-on Internet connections.

The firewall systems are designed to save small businesses information technology costs by bundling services into a complete package with a monthly service fee. The TeleDefend Firewall and the TeleDefend VPN/Firewall filter all incoming and outgoing network traffic using NetScreen, a device based on the NetScreen 5XP platform. NetScreen is an integrated security device specifically designed for security and virtual private networks (VPN), and can accommodate an unlimited number of computers/users within a local area network.

“What sets our TeleDefend firewalls apart is that they are targeted toward small and medium business markets in terms of ease-of-use and affordability,” said Chuck Haas, executive vice president of marketing and strategy and company co-founder. “Our TeleDefend services are fully managed by our security operations center so small and medium business owners don’t have to worry about the complexities of security, or even worse, not even having security. In effect, it’s a plug-it-in and it works kind of a system. We’ve preconfigured it for the customer.”

Covad’s security operation center also offers upgrades and patches for the TeleDefend firewalls.

December proved to be a pivotal month for the broadband provider. Covad nearly flatlined before receiving a $150 million cash bailout from SBC Communications that essentially put it back on the telecommunications map.

The company expanded its broadband services for small businesses into nine new markets and began rolling the assets of other defunct telecommunications companies into its holdings, among them the assets of InternetConnect, a Torrance, Calif.-based Internet Service Provider (ISP).

Covad purchased the defunct company’s assets for an estimate $7 million, which included a significant number of virtual private network customers, and DSL and T1 broadband connections mainly located in California, Chicago, Boston, and Washington, D.C. InternetConnect had been in bankruptcy since May.

Covad also bought out broadband lines from Flashcom,, and Relay Point, all former wholesale customers that didn’t reach the scale to be profitable and lost their footing in last year’s telecommunications fallout.

In an effort to help customers segue from financially distressed ISPs, the company developed and implemented its Safety Net Program designed as a conversion option for customers looking to jump ship from their ISPs into a more secure network. Safety Net helps either small business or home users migrate onto their IP network with minimal changes to their networks or user identification.

“December was a great month for us,” said Haas. “We really looked at that time as the restart of our company and the vision of providing high speed connectivity to small and medium size businesses. We are fully funded. We’ve reduced our burn rate substantially, and you can expect to see great things from us this year. There is market demand out there and they love what we offer.”

Covad was founded in 1996 and went public in January 1999.

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