Covad Announces Strategy and Services to Expand Broadband Opportunities Across Multiple Distribution Channels - Company Business and Marketing

Cambridge Telcom Report, March 13, 2000

Covad Communications (Nasdaq: COVD), the leading national broadband services provider utilizing DSL (Digital Subscriber Line) technology, Thursday introduced a new set of value-added services that will provide current customers with new capabilities to scale their businesses and allow new customer channels to offer broadband services. These services, referred to as Virtual Broadband Services and DSL Plus IP (Internet Protocol), provide end to end broadband services to Covad distribution channels, including Internet Service Providers (ISPs), businesses and special interest organizations. With these services, companies can deepen their relationship with customers by expanding their Internet-based branding and marketing capabilities while providing consumers greater choice in purchasing Internet access.

"Driven by the Internet, which is changing the relationship between buyers and sellers, today we are executing our strategy by providing the tools for companies who want to develop enduring relationships with their customers," said Robert E. Knowling, Jr., Covad chairman, president and CEO. "Providing companies these branded broadband capabilities will help ensure that the relationship with their customers deepens and sticks."

Covad's new branded broadband access services free up businesses and organizations to focus on building their brands and marketing directly to their customers without the associated complexities of building and managing network infrastructure. These targeted marketing efforts result in decreased marketing costs while increasing the value of each customer, and ultimately growing the overall broadband arena.

"Covad is helping to grow the broadband opportunity and providing capabilities for both existing and new channel customers to meet the demand for the broadband experience," said Rich Wong, vice president of Marketing for Covad. "With broadband penetration of the dial-up Internet base at only 3 percent, there is a huge opportunity ahead of us."

DSL Plus IP The DSL Plus IP service provides the integration of Covad's broadband network with IP services, allowing Covad's channel customers to efficiently and rapidly expand their market reach and reduce operational complexities by outsourcing to Covad the complete network function (DSL Plus IP). In addition, it allows ISPs to offer their customers broadband services at an attractive price and fulfill the associated high volume demand. (Editor's Note: see release on March 9, 2000.)

Some of the first channel customers to utilize the new service are leading national Internet Service Providers including Juno Online Services (NASDAQ: JWEB), Prodigy Communications Corporation (NASDAQ: PRGY) and 1stUp.com.

Covad is providing the DSL Plus IP services by adding gateway routers throughout Covad's regional network. The Internet connectivity utilizes IP network providers such as Level 3 Communications, and seamlessly integrates these services into Covad's existing nationwide DSL network.

Virtual Broadband Service Provider (VBSP) The Virtual Broadband Service is a complete turnkey solution for organizations and businesses that want to deepen consumer brand affinity by using Internet services. In effect, the service enables businesses and organizations to become "Virtual Broadband Service Providers." The new capability is facilitated by Covad's acquisition of Media, PA-based LaserLink.net, a leading indirect provider in the rapidly growing arena of branded Internet access.

Covad will provide organizations the capability to deliver complete broadband Internet services to their end-users through company branded access and services. This capability creates instant marketing and communications channels, the ability to bundle complementary services and total branding throughout each service component. It also provides end-users with a wider choice of places to buy Internet access.

For example, a company or organization that wants to offer Internet access to its end-users can utilize the Virtual Broadband Service to quickly offer broadband Internet access. End-users can then sign up for the Internet and broadband services under the "companyname.net" brand. Companies who embrace this model will benefit from the ability to deliver a deeply branded broadband experience to their end-users with minimal infrastructure investment.

Along with providing the national broadband network connections, Covad will offer the following fully-branded Internet services: fulfillment process, registration, connection and Internet software, web sites, network authentication, electronic mail, billing and reporting, news and personal web space for subscribers and customer service and technical support.

"Offering Covad channels the option for a fully branded broadband service is a strong positive step to expand Covad's range and scope of effective channel partnerships," said Brett Sheppard of TeleChoice. "This type of flexibility will help Covad remain a strong market force in bringing broadband to the masses."