Covad Locks in SBC-AT&T

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 .