COVAD SAVES MILLIONS AS VERIZON RESTRUCTURES COLLOCATION RATES.

Verizon's operating subsidiaries in New York and Massachusetts have recently eliminated the rate structure that tripled collocation power rates charged to Covad Communications (Nasdaq:COVD) and other competitive local exchange companies. The restructured power rates start immediately and are expected to save Covad, a leading national broadband services provider utilizing DSL (Digital Subscriber Line) technology, millions of dollars in power charges. In New York state alone, Covad could save as much as $2.9 million annually.

"This is an important move by Verizon to discontinue the rate structure that tripled collocation power rates for Covad and other industry competitors in New York and Massachusetts," said Dhruv Khanna, Covad co-founder, executive vice president and general counsel. "Verizon's former rate structure increased the prices that competitive telecommunications providers like Covad pay for collocation power. We hope that Verizon will extend the re-structured power rates to all of the states in its territory."

Covad chairman Chuck McMinn said, "This action by Verizon is another example of how we are looking at all aspects of our business to continue to reduce our costs. We have not let up the pressure on the phone companies to perform better."

Verizon's actions came in response both to a joint complaint of Covad and AT&T at the New York Public Service Commission as well as Covad's advocacy on Verizon's application to provide long distance service in Massachusetts. Covad also plans to seek refunds for past over-charges based upon Verizon's discontinued rate structure for collocation power.

About Covad Communications

Covad is the leading national broadband services provider of high-speed Internet and network access utilizing Digital Subscriber Line (DSL) technology. Covad offers DSL, IP and dial-up services through telecommunications carriers, enterprises, affinity groups, PC OEMs, application service providers, and Internet Service Providers that resell Covad DSL to homes and small businesses. Covad's other subsidiaries include Covad Business Solutions, which provides customized broadband solutions directly to small businesses, and Covad's Integrated Services (CIS) division, which enables companies and organizations to become virtual Internet and broadband service providers.

Covad services are currently available across the United States in 109 of the top Metropolitan Statistical Areas (MSAs). Covad's network currently covers more than 40 million homes and business and reaches approximately 40 to 45 percent of all US homes and businesses. Corporate headquarters is located at 4250 Burton Drive, Santa Clara, CA 95054.

For more information, call 1-888-GO-COVAD or 408/987-1614 or visit http://www.covad.com.