Covad Applauds FCC Broadband Policy Success as DSL Deployment Posts Record Growth.

Business Editors/High-Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--Dec. 17, 2002

Covad Communications (OTCBB:COVD) today applauded Federal Communications Commission (FCC) policies that helped increase DSL deployment by 29 percent over the last six months. The FCC released its semi-annual report today on the state of broadband deployment in the U.S., which cites this statistic.

"These statistics demonstrate the unqualified success of the FCC's broadband policies in promoting the widespread deployment of broadband services to consumers and small businesses," said Charlie Hoffman, Covad's president and CEO. "Over five million Americans today subscribe to DSL services -- services that were not widely deployed to residential customers until 1999, after the FCC adopted its line sharing rules. Today's FCC report further underscores the critical role of line sharing in guaranteeing consumers access to the widest variety of innovative broadband choices."

According to the FCC's statistics, broadband deployment continued to grow in the first half of 2002. By June 30, 2002, more than 14 million American residential consumers subscribed to broadband services -- a jump of 27 percent since the second half of 2001. DSL deployment by incumbents and competitive providers also continued to grow, increasing by over 29 percent in six months.

This latest data continues a trend of uninterrupted broadband growth since 1999, when the FCC adopted its line sharing rules and expanded opportunities for competitive deployment of residential DSL services.

Hoffman continued, "Covad congratulates Chairman Powell and the FCC on the remarkable success of these broadband policies in providing an ever-increasing number of Americans with access to these vital broadband links. The FCC's implementation of the 1996 Telecommunications Act has enabled Covad to provide consumers with lower-priced, more innovative DSL services. This growth also provides powerful proof that the FCC's continued support of competition and line sharing fosters the potential for explosive growth in broadband deployment."

About Covad Communications

Covad is a leading national broadband service provider of high-speed Internet and network access utilizing Digital Subscriber Line (DSL) technology. It offers DSL, T1, managed security, IP and dial-up services and bundled voice and data services directly through Covad and through Internet Service Providers, value-added resellers, telecommunications carriers and affinity groups to small and medium-sized businesses and home users. Covad services are currently available across the United States in 94 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 3420 Central Expressway, Santa Clara, CA 95051. 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 press release that are not historical facts are "forward-looking statements," including the statements made by the president and CEO and the assumptions underlying such statements. Actual events or results may differ materially as a result of risks facing Covad or actual results differing from the assumptions underlying such statements. Such risks and assumptions include, but are not limited to, Covad's ability to continue as a going concern, to continue to service and support its customers, to successfully market its services to current and new customers, to manage the consolidation of sales to a fewer number of wholesale customers, to successfully migrate end users, Covad's ability to generate customer demand, to achieve acceptable pricing, to respond to competition, to develop and maintain strategic relationships, to manage growth, to receive timely payment from 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 and the absence of an adverse result in litigation against Covad. Covad disclaims any obligation to update any forward-looking statement contained in this press release. All forward-looking statements are expressly qualified in their entirety by the "Risk Factors" and other cautionary statements included in Covad's SEC Annual Report on Form 10-K for the year ended December 31, 2001 and its Report on Form 10-Q for the period ended September 30, 2002.