Covad Believes Line Sharing is Safe and Court Decision Will Have No Effect.

Business Editors/High-Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--May 24, 2002

The Court Remanded Final Ruling to FCC Which Has Strong

History of Supporting Line Sharing Policy

Covad Communications (OTCBB:COVD) believes that today's decision from the US Circuit Court of Appeals in the District of Columbia should not ultimately have any effect on line sharing. The Court ruling sent the line sharing issue back to the Federal Communications Commission (FCC) for review, which has a history of strong support for line sharing policy. In fact, the FCC is already reviewing line sharing as part of its current triennial review process.

Covad founder and General Counsel Dhruv Khanna said, "While I believe the court was off-base in this decision, it ultimately shouldn't change a thing for Covad and I believe that line sharing will remain in place. We believe we have a continued right to line sharing under our agreements with the phone companies and anti-trust law.

"The only reason the court cited for remanding the line sharing mandate back to the FCC is to allow the Commission to consider the availability of cable broadband service in its decision. Since the FCC unanimously supported line sharing originally, including the current chairman, we feel confident that the Commission will remain committed to keeping line sharing permanently. In fact, the FCC aggressively defended the concept of line sharing in this case as recently as March of 2002, with the full understanding of the impact of cable service on the broadband market. We also believe that Bell companies are required to provide Covad with line sharing under applicable state and federal laws."

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, T1, managed security, IP and dial-up 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 statements concerning Covad's ability to receive line-shared service, anticipated FCC decisions, anticipated growth, expected court rulings, regulatory developments, revenue expectations, anticipated reductions of costs and losses, expected reductions in cash usage, ability to continue as a going concern, sufficiency of Covad's cash on hand, additional capital requirements, ability to secure additional financing, ability to become cash flow positive and achieve profitability and the statements made by the president and CEO and the executive vice president and general counsel 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. 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 March 31, 2002.