Covad Locks in SBC-AT&T

Friday May 6th 2005 by Colin C. Haley

The DSL provider will connect homes and businesses outside the new telecom powerhouse's footprint.

Covad Communications is now rooting for speedy approval of the SBC-AT&T combination.

The San Jose, Calif., DSL provider today announced that the carriers will continue to use Covad as a nationwide broadband partner when the merger becomes official next year.

In addition to locking in long-term contracts, Covad could see more business from the combined company than it would if they stayed separate.

SBC-AT&T is expected to make a nationwide push to expand its sale of IP services, including Voice over IP , to better compete with Verizon-Qwest.

Covad will be the provider of choice to hook up customers to DSL (a prerequisite for VoIP and other IP services) in the 24 states outside of SBC-AT&T's territory, including the big-market states of Colorado, Florida and New York.

Government regulators will likely spend a year to 18 months reviewing the SBC-AT&T mega-merger. Although it will face resistance from some consumer groups and smaller telecom carriers, the deal is expected to win approval.

Covad also re-negotiated its line sharing deal with SBC until May 2009, Covad spokesman Pavel Radda said.

The agreement, effective immediately, guarantees Covad access, at a set price, to SBC lines to offer its own high-speed Internet services to businesses and consumers in 13 states.

Terms were not disclosed. Covad has struck similar deals with Verizon and Qwest .

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