TelePacific Communications has received regulatory approval for and completed the acquisition of NextWeb, Inc., dba Covad Wireless, a broadband fixed wireless carrier operating in California, Nevada and the Chicago, Illinois area.

Through its acquisition of NextWeb, TelePacific now controls a WiMAX-featured wireless broadband network, a licensed microwave backhaul network, and a high bandwidth wireless network operating in licensed LMDS spectrum. The new network assets complement TelePacific’s existing footprint and allows the company to broaden its product offerings in markets where it is already competitive. Further, the purchase supports TelePacific’s strategy of investing in advanced broadband transport technologies.

TelePacific will also gain the benefit of approximately 3,500 profitable broadband fixed wireless business customers in California, Nevada and suburban Chicago.

“We are pleased to welcome Covad Wireless customers to the TelePacific family and look forward to introducing them to TelePacific’s signature customer service,” said Dick Jalkut, President and CEO of TelePacific. “The additional resources we gained through this acquisition—the fixed wireless network and experienced wireless team, have enhanced our ability to serve our customers. Each new acquisition has made us stronger and TelePacific is well-positioned to expand its market share.”

Future and existing TelePacific customers will benefit from increased availability of high bandwidth data products with symmetrical upload and download speeds up to 100 Mbps. In addition, new redundancy options and special event Internet access will be available. Customers will also enjoy fast installs because incumbent local exchange carrier (ILEC) loops will not be needed to deliver these services.

TelePacific extended employment offers to all Covad Wireless employees at the time of the acquisition close and is fortunate to have them supporting legacy Covad Wireless customers. TelePacific continues to be privately-held and financial terms of the deal were not disclosed.

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MegaPath, Covad and Speakeasy today announced regulatory approval and the completion of their merger, creating a next generation Managed Services Local Exchange Carrier (MSLEC). The new company will have relationships with more than 85,000 business customers and over 4,500 partners throughout North America. The combined company will be called MegaPath and will operate one of the largest end-to-end facilities-based IP communications networks in the country.

“For too long in the telecommunications industry, customer service and reliability have taken a back seat”

“For too long in the telecommunications industry, customer service and reliability have taken a back seat,” said D. Craig Young, Chairman and CEO of MegaPath. “With the combination of MegaPath, Covad and Speakeasy, we are bringing to market a leading nationwide IP network to deliver a complete line of end-to-end managed services, including voice, data and security. Small, medium and large enterprises will now benefit from a new service provider that is willing to invest in advanced services, while remaining heavily focused on customer service.”

With the combination of MegaPath, Speakeasy and Covad, the new MegaPath will provide a complete voice, access, private networking and managed security solution for business customers of all sizes with a turnkey solution for conducting business and communicating with customers, partners and employees. In addition, its leading voice services combine broadband and voice capabilities with Quality of Service (QoS) monitoring for superior call clarity, which is backed up by industry-leading service level agreements (SLAs).

The new MegaPath remains a privately held company. Moving forward, it will serve the market through two divisions: a wholesale operating division and a direct, business markets division. The Company’s executive team includes D. Craig Young, former CEO of MegaPath, who now serves as Chairman and CEO; Pat Bennett, former CEO of Covad, as Chief Strategy Officer and Head of Wholesale Markets; and Bruce Chatterley, former CEO of Speakeasy, as President of the Business Markets unit in charge of all non-wholesale customer sales, service and marketing.

Financial terms of the merger were not disclosed.

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Now Covad and MegaPath have announced to merge, what does that mean to their customers and to their channel partners? Nothing but good according to Dan Foster, but what other way is there to start a merger than saying only good things will come from it.

“Combining MegaPath and Covad resources will enable us to expand service offerings to customers, as well as provide more choices and value. Frankly, customers have been asking us to take a broader role in  helping them meet their evolving  business communications needs, and we can feel confident in our ability to meet customer needs as the only managed service provider capable of providing a full range of Internet, voice, security, and VPN services — all backed by a nationwide network. This is really an exciting place to be.”

Read Dan Foster’s blog post here.

What will be the merger impact on the channel?
Phone+ Magazine article

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Covad Communications Company, a leading national provider of IP broadband services, and MegaPath Inc., a leading provider of managed IP data, voice and security services in North America, today announced an agreement to combine the operations of Covad and MegaPath.

Pending federal and state regulatory approvals, the transaction will create one of the largest managed service local exchange carriers (MSLEC) in the United States. The combined businesses will have the largest Ethernet, DSL and T1 footprint in North America and be the only MSLEC capable of providing a full range of Internet, voice, security and VPN services nationwide.

“This transaction brings together two industry leaders who will focus on expanding service offerings and distribution channels to further our leadership positions in the SMB, enterprise and wholesale markets,” said D. Craig Young, MegaPath CEO and the new Executive Chairman of the combined businesses. “By leveraging the strengths of each company, we will provide customers and partners with expanded expertise, broader innovative services and a powerful network that simplifies the way they communicate and conduct business online.”

“We will continue to provide innovative services and superior automation to our wholesale partners, and by adding MegaPath’s leading managed service offerings, we will further enhance the value we deliver to the market,” said Pat Bennett, CEO of Covad, who will continue as Chief Executive Officer. “The combination of these two companies creates a powerful new business model that provides users and partners with the industry-leading connectivity and services they require to support their critical business communications needs.”

Covad offers IP broadband services in more than 4,400 central offices nationwide through its commercial and wholesale distribution channels. Covad wholesale partners include leading providers such as AT&T, Verizon Business and Sprint; MegaPath delivers value-added communication services, including hosted VoIP, managed security, MPLS VPNs for connecting multiple sites, and SSL VPNs for connecting remote users and business partners. MegaPath distributes its services via a large direct sales force and channel sales partnerships, and has over 19,000 direct SMB and enterprise customers.

By combining Covad’s robust network infrastructure with MegaPath’s wide selection of products and value-added services, the transaction promises to provide the companies’ partners and customers with a superior selection of cost-effective IP voice, data communications and security solutions.

“This is a great deal for Covad and MegaPath stakeholders and customers, creating an industry leader with the agility, expertise and resources to address customers’ rapidly growing and changing communications needs,” said Johnny O. Lopez, partner at Platinum Equity, which owns Covad. “With such complementary businesses, partners and customers will quickly see new services and capabilities that provide them even greater value, while the company realizes improved efficiencies and greater profitability, and enhanced opportunities for growth through acquisition.”

The combined businesses will be owned by Platinum and MegaPath investors. Terms of the deal were not disclosed. The transaction is subject to federal and state regulatory approvals and is expected to close by the end of Q3 2010.

Read more: http://www.megapath.com/news/2010/COVAD-AND-MEGAPATH-ANNOUNCE-MERGER-AGREEMENT.cfm#ixzz0jqZ5wVZ1

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Covad Communications Company announced the nationwide availability of Covad MPLS VPN services, along with new Quality of Service (QoS) / Class of Service (CoS) capabilities that complete the company’s rollout of an intelligent network platform partners can use to deliver innovative services at reduced costs.

“Adding QoS / CoS capabilities to Covad’s MPLS infrastructure allows our partners to deliver revenue-generating, value-added services on a national broadband platform that can be customized for real-time applications,” said Young-Sae Song, Vice President of Marketing for Covad Wholesale. “Value-added applications such as VoIP, video conferencing, VPN, and software as a service (SaaS) increase revenue potential and help encourage customer loyalty.”

“Thinking Phone Networks is evolving its relationship with Covad as Covad itself evolves,” said Derek Yoo, Chief Technology Officer for Thinking Phone Networks. “The introduction of services like QoS / CoS across so many types of access with the right levels of performance—like the number of concurrent calls or handling of real-time audio—allows us to further enhance our enterprise communications solutions. Covad is helping us differentiate our hosted business applications in the marketplace.”

Covad QoS / CoS enhances the company’s wholesale broadband services by enabling partners to take full advantage of network traffic management for applications dependent on high delivery and low latency. Covad CoS uses industry best-practice prioritization at the entry points to the broadband circuit, allowing the prioritization of different traffic types, such as VoIP and data, to enhance the performance of an end customer’s critical applications.

MPLS VPN
Covad MPLS VPNs are for SMBs and distributed enterprises that need to share information and applications securely and privately between locations. Covad MPLS VPNs protect sensitive company information end-to-end on the Covad carrier-grade nationwide network using fast, reliable and intelligent WAN connectivity. Because MPLS VPN traffic never touches the public Internet, it is protected from attacks or malicious activity.

Capital expenditures are minimal with no costly VPN equipment to purchase at each location. This is a key reason why adoption of MPLS VPNs is expected to rise rapidly in the price-sensitive SMB market.

“Covad’s secure, private and affordable MPLS VPN services can be delivered over any type of broadband connection, from DSL for branch offices to DS3 s for headquarters,” said Song. “With Covad-managed MPLS VPNs, partners can provide their end customers with a scalable, cost-effective solution for secure, private WAN connectivity.”

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Covad Communications Company has completed the next phase of its broader network transformation strategy by building out its access portfolio with the introduction of DS3 service for performance-intensive applications and enterprise connectivity, as well as higher-bandwidth bonded T1 offerings up to 12.0 Mbps. Covad has also introduced network-wide Quality of Service (QoS) capabilities to enable partners to layer on value-added services and applications.

“Covad is rapidly evolving its network to create an intelligent broadband services platform that partners can use to expand their offerings, reach more customers, and increase revenues,” said Young-Sae Song, vice president of marketing for Covad Wholesale. “Covad’s application-aware network capabilities allow our partners to customize network performance for specific applications, like VoIP, video conferencing, and software as a service (SaaS).”

In February, Covad completed a nationwide MPLS deployment and network capacity upgrades that included metro optical rings with up to OC-192 (10 Gbps) capacity.

“The market reaction to Covad’s network transformation has been strong,” said Bill Ferraiuolo, senior vice president and general manager of wholesale services. “Covad has increased the number of partners actively selling multi-bonded T1s by almost 20 percent, and we are finding healthy market demand for a partner who can provide a complete solution for all service network needs, from access to transport.”

Glowpoint, Inc., is a leading provider of advanced video communications solutions that enable organizations to communicate with each other over disparate networks and technology platforms. “For advanced applications like our Broadcast Television offering, the need for fast delivery of a high-quality network is critical to our success. Covad has been, and continues to be, a key component of our success,” says Tom Schroeder, vice president of operations at Glowpoint.

Quality of Service (QoS) to Enable Value-Added Services

Covad QoS gives partners more flexibility and control over their end user offerings by allowing them to match the appropriate QoS level with their specific application requirements.

Covad has introduced five levels of broadband QoS, each with predefined network priority settings, delivery targets and latency levels—for example, QoS with reduced jitter for VoIP, or QoS with lowest possible latency for mission-critical, real-time applications. Partners can pair the appropriate QoS level with a specific application to ensure their customers are getting optimal performance levels.

Higher-Bandwidth Offerings upto DS3

“More and more business customers are seeking high-capacity, high-bandwidth solutions for corporate data access, WAN connectivity, and performance-intensive applications,” said Vikas Khanna, vice president of broadband technology for Covad. “Partners can cost-effectively expand their solutions portfolios and grow their revenue potential with Covad’s reliable, nationwide portfolio of access services.”

Covad DS3 service provides mission-critical Internet access, with symmetrical speeds up to 35 Mbps. Covad DS3 services are available nationwide and are ideal for companies that need connectivity to their headquarters and larger branch office locations, as well as companies hosting or accessing bandwidth-intensive applications or transmitting large volumes of images, video, or other data.

Covad’s higher-speed bonded T1 offerings provide up to 12.0 Mbps of symmetrical bandwidth to meet the demanding broadband needs of small businesses and distributed enterprises, further addressing the gap between T1 and DS3 offerings.

“Covad’s new higher-bandwidth services should allow us to address a segment we could not serve previously,” said Jason Ness, chief executive officer, Telnes. “We are excited to see that Covad is continuing to invest in its network and developing wholesale services that will help us enter new markets and increase revenue.”

Covad is the “easy to do business with” choice for partners, who benefit from the company’s streamlined provisioning and ordering systems, scalable, cost-efficient support infrastructure, and nationwide, facilities-based network. Covad Wholesale customers span a broad spectrum, from market leaders like Sprint, Verizon and AT&T to regional customers and smaller nationwide carriers.

advertisement: Compare DS3 Pricing and Availability from Covad and others

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Covad Communications Group, Inc  announced the availability of higher-bandwidth access services as part of a broader transformation toward offering a full suite of access and network services.

The new Covad Bonded T1 services are available to Covad’s wholesale partners. They will provide up to 6.0 Mbps of symmetrical bandwidth with no distance limitations to meet the demanding broadband needs of small businesses and distributed enterprises, filling a need between T1 and DS3/Fractional DS3 offerings.

The need for higher bandwidth is driven by demand for advanced services such as video conferencing. The new offerings are the next phase of Covad’s plan to upgrade the access edge of its network to better enable business customers to take advantage of those services. The combination of higher-bandwidth services and application-aware MPLS services provides an intelligent broadband services platform that Covad wholesale partners can leverage to deliver revenue-generating, valueadded services.

“The broadband market is moving towards higher-bandwidth services, and Covad is committed to delivering a product portfolio that meets the market needs and helps our wholesale partners increase revenue,” said Brett Flinchum, chief operations officer at Covad. “Leveraging the proven reliability of T1 technology to deliver these services allows Covad to reach more businesses than competitors using alternative technologies, maximizing our partners’ revenue potential.”

“Bonded T-1 services fill a critical gap in the bandwidth portfolio, allowing midsize enterprise customers to scale incrementally as needs change,” said Robert F. Mason, who covers network services as a principal research analyst for Gartner Inc.

Covad’s new higher-bandwidth services are delivered over Covad’s nationwide MPLS network. Extensive automation simplifies ordering and accelerates the typical installation to within 30 days. Covad also provides enterprise-class support, with assistance 24 hours a day to partners and customers from a specialized team of T1 experts.

Related link: Compare Bonded T1 pricing

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Covad Communications Company, a leading national provider of voice and data communications, today announced it has certified IP PBXs from TalkSwitch, Grandstream, Vertical and Epygi for its new Covad Integrated Access service.
IP PBXs certified by Covad include:

• TalkSwitch IP PBX equipped for VoIP (models 244/248vs, 284/288vs, 484/488vs and 844/848vs)
• Grandstream GXE502X ALL-IN-ONE IPPBX
• Vertical Xcelerator IP
• Epygi Quadro 2x and Quadro 4x IP PBX

“Covad Integrated Access service is an affordable, all-in-one phone and Internet service designed specifically for businesses with up to 35 employees per location to simplify their operations by looking to one vendor to provide their phone and Internet services. This means one bill and one contact for support,” said Jake Heinz, vice president and general manager, Covad VoIP.

“Certification means Covad has tested the equipment and found it to work well with our Covad Integrated Access service.”
Covad Integrated Access service is delivered over a powerful voice-optimized T1 line and works with customers’ existing phone systems so businesses can leverage their equipment investment while saving money and simplifying operations. Covad Integrated Access now also utilizes SIP trunking and supports a wide range of IP, digital and analog PBXs.
Pricing starts as low as $435 per month with no installation fees, depending upon contract length and services ordered. Customers can start with as few as four phone lines. New lines can also be added one at a time, rather than in the more typical “blocks” offered by competitors, making it easier to grow the service with the company.

Integrated Access service uses Covad’s voice-optimized technology to dynamically allocate bandwidth between voice and data. By always prioritizing voice traffic and automatically allocating all remaining bandwidth to data traffic, it provides maximum call quality and data throughput. Covad Integrated Access service is backed by expert 24×7 support and robust service level agreements.

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Platinum Equity has completed the acquisition of Covad Communications Group on april 15th. The total value of the transaction is approximately $470 million. The acquisition was a public-to-private transaction in which an affiliate of Platinum Equity acquired all outstanding shares of Covad stock for $1.02 per share in cash. The company previously traded on the American Stock Exchange under the ticker symbol DVW.

“Covad has been an innovator since the day it became the first enterprise to commercially deploy DSL in the United States,” said Johnny O. Lopez, partner for Platinum Equity. “We have high expectations for the company’s continued growth and market leadership.”

The companies announced the planned acquisition in October 2007 and have spent the last several months obtaining the required regulatory and stockholder approvals. Covad owns and operates the largest national broadband network and is the only national facilities-based provider of data, voice, and wireless telecommunications solutions for small and medium-sized businesses. Covad is also a key supplier of high-bandwidth access for telecommunications services providers like EarthLink, AT&T, and Verizon Business. Covad services are currently available in 44 states and 235 major markets and can be purchased by more than 57 million homes and businesses.

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Covad Communications Group, Inc. (AMEX: DVW) announced its third quarter of 2007 financial results, including $121.9 million in net revenues, $10.3 million in A-EBITDA and a net loss of $4.9 million, or a $0.02 loss per share.

“In the third quarter, our share of subscription revenues from higher-margin growth products exceeded fifty percent for the first time and our A-EBITDA increased significantly,” said Charles Hoffman, Covad president and chief executive officer. “These results prove that our strategy of transforming our business away from legacy products is the right one, and we will continue to focus on delivering services that meet our customers’ demand for higher bandwidth and more value.”

Summary of Financial Results

• Net revenues for the third quarter of 2007 totaled $121.9 million, an increase of $1.3 million from the $120.6 million reported for the second quarter of 2007, and an increase of $3.3 million from the $118.6 million reported for the third quarter of 2006.
• Direct subscribers for the third quarter of 2007 contributed $45.3 million of net revenues, or 37.2 percent, as compared to $44.0 million, or 36.5 percent, for the second quarter of 2007, and $40.3 million, or 34.0 percent, for the third quarter of 2006. Wholesale subscribers for the third quarter of 2007 contributed $76.6 million of net revenues, or 62.8 percent, as compared to $76.6 million, or 63.5 percent, for the second quarter of 2007, and $78.3 million, or 66.0 percent, for the third quarter of 2006.
• Subscription revenue from Growth products for the third quarter of 2007 totaled $56.8 million, an increase of $3.0 million, or 5.6 percent, from the second quarter of 2007, and an increase of $12.8 million, or 29.1 percent from the third quarter of 2006.
  Covad’s growth products are T-1, business ADSL, Line-Powered Voice Access (“LPVA”), Voice over Internet Protocol (“VoIP”) and wireless. The increase from the second quarter of 2007 was attributable to increases in broadband subscription revenue from T-1, business ADSL and LPVA of $2.2 million, and VoIP subscription revenue of $0.8
  million. The increase from the third quarter of 2006 was attributable to increases in broadband subscription revenue from T-1, business ADSL and LPVA of $8.7 million, VoIP subscription revenue of $3.6 million and wireless subscription revenue of $0.5 million. Subscription revenue from Growth products for the third quarter of 2007 contributed 51.0 percent of total subscription revenues, an increase of 2.5 percent from the second quarter of 2007 and an increase of 10.3 percent from the third quarter of 2006. Refer to the Selected Financial Data below, including Note 3, for additional information, including a summary of subscription revenue from Growth and Legacy products and a reconciliation of subscription revenue to the most directly comparable GAAP measure.
• Subscription revenue from Legacy products for the third quarter of 2007 totaled $54.5 million, a decrease of $2.5 million, or 4.4 percent, from the second quarter of 2007, and a decrease of $9.7 million, or 15.1 percent from the third quarter of 2006. Covad’s legacy products, primarily sold through wholesale channels, are consumer ADSL, business SDSL, frame relay and high-capacity transport circuits. The decreases from the second quarter of 2007 and third quarter of 2006 were primarily attributable to decreases in broadband subscription revenue from consumer ADSL and business SDSL
  and frame relay products. Subscription revenue from Legacy products for the third quarter of 2007 contributed 49.0 percent of total subscription revenues, a decrease of 2.5 percent from the second quarter of 2007 and a decrease of 10.3 percent from the third quarter of 2006. Refer to the Selected Financial Data below, including Note 3, for
  additional information, including a summary of subscription revenue from Growth and Legacy products and a reconciliation of subscription revenue to the most directly comparable GAAP measure.
• Revenue from business subscribers for the third quarter of 2007 contributed $96.9 million of net revenues, a 1.3 percent increase from the second quarter of 2007 and a 5.0 percent increase from the third quarter of 2006. Revenue from business subscribers comprised 79.5 percent of net revenues, up from 79.4 percent in the second quarter of
  2007 and 77.8 percent in the third quarter of 2006. Revenue from consumer subscribers for the third quarter of 2007 contributed $24.9 million of net revenues, the same as the $24.9 million in the second of 2007 and down from $26.3 million in the third quarter of 2006. Revenue from consumer subscribers for the third quarter of 2007 comprised 20.5 percent of net revenues, down from 20.6 percent in the second quarter of 2007 and 22.2 percent in the third quarter of 2006.
• Adjusted earnings before interest, taxes, depreciation and amortization (“A-EBITDA”) for the third quarter of 2007 totaled $10.3 million, up from the $4.3 million A-EBITDA reported for the second quarter of 2007, and up from the $4.5 million A-EBITDA reported for the third quarter of 2006. The improvement in A-EBITDA in the third
  quarter of 2007 was primarily due to increased revenue from new growth products such as Line Powered Voice Access and Bonded T1 as well as savings realized as a result of reductions in Covad’s workforce during the second quarter of 2007 and other cost containment initiatives. Refer to the Selected Financial Data below, including Note 2, for
  additional information, including a reconciliation of this non-GAAP financial performance measure to the most directly comparable GAAP measure.
• Net loss for the third quarter of 2007 totaled $4.9 million, or $0.02 loss per share, compared to the $11.6 million net loss, or $0.04 loss per share, reported for the second quarter of 2007 and the $8.7 million net loss, or $0.03 loss per share, reported for the third quarter of 2006.
• Cash, cash equivalents and short-term investments, and restricted cash and cash equivalents at the end of the third quarter of 2007 totaled $64.2 million, a decrease of $1.4 million when compared to the balance of $65.6 million at the end of the second quarter of 2007. This change in cash, cash equivalents and short-term investments, and restricted cash and cash equivalents for the third quarter of 2007 included $3.6 million of on-going expenditures related to Covad LPVA services, which is being funded with the proceeds from the strategic agreement with EarthLink, and $0.6 million of
  post-employment benefit payments related to the reduction in workforce.
  “The third quarter results reflect our continued focus on increasing sales of our growth products while managing an efficient and disciplined cost structure across all product lines,” said Justin Spencer, Covad’s chief financial officer. “Subscription revenue from our growth products exceeded that from legacy services in the third quarter, a key milestone for the company as we orient the business more to our growth services. We also improved our cash performance in the third quarter, increasing unrestricted cash by $2.3M.”

Business Outlook
Covad’s full year guidance is unchanged. For the fiscal year 2007, Covad expects:

• Net revenues in the range of $485 – $505 million
• A-EBITDA in the range of $25 – $35 million
• Net loss in the range of $27 – $41 million

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Update: see Covad Megapath Merger

Covad Communications Group Inc., (AMEX: DVW), a leading national provider of integrated voice and data communications, today announced that it has signed a definitive agreement to be acquired by Platinum Equity in an all-cash transaction.

Under the terms of the agreement, which was unanimously approved by Covad’s Board of Directors following the recommendation of its special committee, an affiliate of Platinum Equity will acquire Covad for $1.02 per share in cash. The purchase price represents a 59 percent premium to the closing price of Covad’s shares on October 26, 2007. The transaction is subject to the approval of Covad’s shareholders and the satisfaction of customary closing conditions, including approval of the Federal Communications Commission and state public utility commissions in many of the states in which Covad operates.

“After a careful and extensive review of our strategic alternatives, our Board of Directors has determined that the substantial premium to the current market price provided by this transaction offers the best value for our stockholders,” said Charles Hoffman, Covad president and chief executive officer. “Furthermore, Platinum’s approach will bolster the successful execution of Covad’s business strategy while providing the resources and support necessary for sustained growth. We believe that the resulting increased market competitiveness, improved capital structure, and enhanced product and network capabilities best position our customers, partners, and employees for the future.”

“Covad has a stellar reputation for quality and innovation, and is one of the premier providers in the broadband access market,” said Johnny O. Lopez, partner and head of global mergers and acquisitions for Platinum Equity. “There is opportunity for growth as the demand for high-bandwidth services continues to evolve, and we’re eager to help Covad drive that growth.”
The transaction is expected to close by the end of the second quarter of 2008.

Barclays Capital served as lead financial advisor to Covad in this transaction. Cowen and Company provided a fairness opinion to Covad’s Board of Directors. Fenwick & West LLP acted as legal counsel to Covad in the transaction and Cahill Gordon & Reindel LLP acted as counsel to the special committee of Covad’s Board of Directors. Bingham McCutchen LLP is acting as legal counsel to Platinum Equity. Houlihan Lokey Howard & Zukin served as advisor to Platinum Equity in this transaction.

As a reminder, Covad will host its third quarter earnings call on Tuesday, October 30, 2007 at 5:00 p.m. ET. For call-in details, please refer to the company’s Investor Relations website located at www.covad.com.

About Covad
Covad is a leading nationwide provider of integrated voice and data communications. The company offers DSL, Voice Over IP, T1, broadband wireless, Web hosting, managed security, IP and dial-up, and bundled voice and data services directly through Covad’s network and through Internet Service Providers, value-added resellers, telecommunications carriers and affinity groups to small and medium-sized businesses and home users. Covad broadband services are currently available across the nation in 44 states and 235 Metropolitan Statistical Areas (MSAs) and can be purchased by more than 57 million homes and businesses, which represent over 50 percent of all US homes and businesses. Corporate headquarters is located at 110 Rio Robles San Jose, CA 95134. Telephone: 1-888-GO-COVAD. Web Site: www.covad.com.

About Platinum Equity
Platinum Equity (www.platinumequity.com) is a global M&A&O® firm specialized in the merger, acquisition and operation of companies that provide services and solutions to customers in a broad range of business markets, including information technology, software, telecommunications, logistics, manufacturing, metals services and distribution. Since its founding in 1995 by entrepreneur Tom Gores, Platinum Equity has completed more than 75 acquisitions with more than $23 billion in aggregate annual revenue at time of acquisition.

About the Transaction
In connection with the proposed merger, Covad will file a proxy statement with the Securities and Exchange Commission. Investors and security holders are advised to read the proxy statement when it becomes available because it will contain important information. Investors and security holders may obtain a free copy of the proxy statement (when available) and other documents filed by Covad at the Securities and Exchange Commission’s Web site at http://www.sec.gov.
The proxy statement and such other documents may also be obtained free of charge from Covad by directing such request to Covad Communications Group Inc., 110 Rio Robles, San Jose, CA Attention: Investor Relations; Telephone: 408-434-2130.

Covad and its directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies from its shareholders in connection with the proposed merger. Information concerning the interests of these individuals in the solicitation is set forth in Covad’s proxy statements and Annual Reports on Form 10-K, previously filed with the Securities and Exchange Commission, and will be provided in the proxy statement relating to the merger when it becomes available.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
The foregoing contains “forward-looking statements” which are based on management’s current information and beliefs as well as on a number of assumptions concerning future events made by management. Examples of forward-looking statements include the expected time of consummation of the merger. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside Covad’s control that could cause actual results to differ materially from such statements. These risk factors include the ability of the parties to the agreement to satisfy the conditions to consummation of the merger, the impact of increasing competition, pricing pressures, consolidation in the telecommunications industry, uncertainty in telecommunications regulations and changes in technologies, among other risks. For a more detailed description of the risk factors that could cause such a difference, please see Covad’s 10-K, 10-Q, 8-K and other filings with the Securities and Exchange Commission. Covad disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This information is presented solely to provide additional information to further understand Covad.

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