Covad Announces Operating Statistics for the Fourth Quarter and 2000; Covad Exceeds Line Expectations for Fourth Quarter.

Business Editors/High-Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--Jan. 8, 2001

Covad Communications (Nasdaq:COVD), the leading national broadband services provider utilizing DSL (Digital Subscriber Line) technology, today announced operating statistics for the fourth quarter and 2000.

Covad ended the year with the following operating results:

Lines in Service

-- 274,000 total lines in service

-- Approximately 50 percent of total lines were business lines and 50 percent
were consumer lines

-- 3 percent of total lines were sold directly to end users and 97 percent were
sold through Covad resellers

Line Sharing

-- Over 17,000 line shared lines were installed this quarter

compared to 400 line shared lines installed in the third

quarter

-- Covad expects the number of line shared lines to increase as

operational processes continue to improve with the incumbent

local telephone companies

-- Success in installing line shared services varies

significantly with the different incumbent local telephone

companies

Non-Revenue Generating ISPs

-- The number of lines that Covad is not recognizing revenue on

is approximately 92,000

-- The number of ISPs for which Covad is not recognizing revenue

has increased to 19

-- Four of the 19 ISPs have filed for bankruptcy protection

Covad Safety Net Program

-- In less than three weeks, approximately 1,500 lines

(representing 30 percent of lines from two ISPs) were

transitioned to Covad.net or another ISP through the Covad

Safety Net program

-- Covad will be working with additional ISPs in the first

quarter to transition more lines in an effort to maintain end

user's broadband connections

"We continue to excel operationally on many fronts. We beat line expectations for the quarter, we have transitioned to a line shared process in our consumer business and we are converting distressed lines through our Covad Safety Net program," said Chuck McMinn, chairman of Covad. "This continued strong operational performance combined with a strict focus on maximizing efficiency in the business, will help us demonstrate significant progress along our new plan for 2001."

About Covad Communications

Covad is the leading national broadband service provider of high-speed Internet and network access utilizing Digital Subscriber Line (DSL) technology. It offers DSL, IP and dial-up services through Internet Service Providers, telecommunications carriers, enterprises, affinity groups, PC OEMs and ASPs to small and medium-sized businesses and home users. Covad services are currently available across the United States in 112 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. Telephone: 888/GO-COVAD. Web Site: www.covad.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

The statements contained in this press release that are not historical facts are "forward-looking statements," including statements concerning the Company's plans to expand its network, market opportunities, the cost, timing and scope of the deployment of the Company's network and launching of its services, implementation of line sharing and self-installation, anticipated capital expenditures, expense reductions and other operating results, success of strategic relationships, and the statements made by the chairman in this release. Actual events or results may differ materially as a result of risks facing the Company or actual results differing from the assumptions underlying such statements. Such risks and assumptions include, but are not limited to, the Company's ability to successfully market its services to current and new customers, the consolidation of sales to a fewer number of wholesale customers, the Company's ability to generate customer demand, to achieve acceptable pricing, to respond to increasing competition, to manage growth, to receive timely payment from our Internet service providers and other customers, to access regions and negotiate suitable interconnection agreements, all in a timely manner, at reasonable costs and on satisfactory terms and conditions, as well as regulatory, legislative, and judicial developments. All forward-looking statements are expressly qualified in their entirety by the "Risk Factors" and other cautionary statements included in the Company's SEC filings.