Covad Announces Strategy and Services to Expand Broadband Opportunities Across Multiple Distribution Channels.

Business Editors & High-Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--March 9, 2000

"Virtual Broadband Services" Tap New Markets, Strengthen Customer

Relationships and Enhance Consumer Choice and Web Experience

Covad Communications (Nasdaq: COVD), the leading national broadband services provider utilizing DSL (Digital Subscriber Line) technology, today 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. (Editors Note: see acquisition release on March 9, 2000)

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."

About Covad

Covad Communications is the leading national broadband service provider of high-speed Internet and network access utilizing Digital Subscriber Line (DSL) technology. It offers DSL services through Internet Service Providers, telecommunications carriers, enterprises, PC OEMs and ASPs to small and medium-sized businesses and home users. Covad services are currently available across the United States in 62 of the top Metropolitan Statistical Areas (MSAs) and will be available in 100 MSAs by the end of 2000. At that time, Covad's network will reach more than 40 percent of all US homes and 45 percent of all US businesses. Covad Communications and its affiliates, doing business as Covad Communications Company, are wholly owned subsidiaries of Covad Communications Group, Inc. Corporate headquarters is located at 2330 Central Expressway, Santa Clara, CA, 95050. Telephone: 1-888-GO-COVAD. Web Site: www.covad.com.

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

The statements contained in this release which are not historical facts may be deemed to contain forward-looking statements, including but not limited to statements regarding the intention to deploy our network in new and existing MSAs, the timing and breadth of coverage in each MSA, our ability to reduce our prices, changes in our installation process, including self-installation, and our ability to provide multimedia content. Actual results may differ materially from those anticipated in any forward-looking statements as a result of certain risks and uncertainties, including, without limitation, the company's dependence on incumbent local exchange carriers for collocation, unbundled network elements, transport and other facilities, development of necessary technologies and operations, ability to manage growth of our operations, and the need to raise additional capital. For other risks and uncertainties applicable to our business refer to the Company's Securities and Exchange Commission filings.