Covad Completes Interim Line Sharing Agreements With All Local Exchange Carriers.

Business Editors, High-Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--June 7, 2000

--Covad Wins Line Sharing Arbitration with SBC and GTE 

in Texas and Signs with SBC and GTE in California--

Covad Communications (Nasdaq:COVD), the leading national broadband services provider utilizing DSL (Digital Subscriber Line) technology, today announced that it has signed or arbitrated interim line sharing agreements with every major local exchange carrier from California to New York.

Covad also won a Texas Public Utilities Commission (PUC) arbitration decision implementing line sharing in Texas. The decision was announced on June 6th, the date by which the FCC ordered local providers to make line sharing available to Covad and other CLECs.

Under the decision of the Texas Commission arbitrators, Southwestern Bell may only charge Covad an interim recurring loop rate of $0.00. The Texas decision is the first in the nation to agree with Covad and other CLECs that the recurring cost of sharing a line is $0.00. GTE had already agreed with Covad that the recurring loop rate should be $0.00.

In another national first, the Texas Commission ordered both companies to provision line-shared loops within three days -- a two-day improvement over existing intervals in Texas. If the loops require special conditioning to eliminate electronics that interfere with data transmission, the provisioning time can expand to 10 days.

"We have worked hard to press the case for consumers and businesses, and we have won significant results in Texas," said Dhruv Khanna, executive vice president and general counsel for Covad. "The Texas arbitrator's endorsement that the zero-cost loop rate is consistent with the pro-competitive purpose of the Telecommunications Act sends an important message to all phone companies still seeking to extract higher long-term costs. In addition, we were pleased that the arbitrators agreed with us that shared lines can be provisioned faster than the phone companies claimed. That decision ultimately means that Texas consumers will get their Covad DSL more quickly after they order our services."

Covad already has an interim line sharing agreement with SBC for California, and is completing negotiations for similar agreements in Texas and the remainder of SBC's territory. Covad also has interim line sharing agreements with GTE in all of its major markets except Texas, where the Commission's decision will form the basis of its interim agreement.

In November of 1999, the Federal Communications Commission (FCC) required local incumbent phone companies to share existing phone lines with competitive carriers, including Covad, by June 6, 2000. Line sharing allows consumers to use their existing phone line for both normal phone service provided by a local phone company and for high speed DSL data access through another provider. The ruling is expected to open the door to increased competition, expanded consumer choice, and streamlined service delivery.

About Covad

Covad is the leading national broadband services 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 74 of the top Metropolitan Statistical Areas (MSAs) and are expected to be available in100 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. 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 overall market demand for the Company's services, the impact of line sharing on DSL installation intervals and pricing, the ability to continue to build out central offices with deployment of the Company's network in new and existing regions, the ability to scale our business, anticipated decisions from regulatory bodies, and the timing and breadth of coverage in each region. 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 strategic third parties to market and resell its services, intense competition for the Company's service offerings, dependence on growth in demand for DSL-based services, dependence on incumbent local exchange carriers for collocation, unbundled network elements and transport, ability to manage growth of our operations and other risks and uncertainties detailed in the Company's Securities and Exchange Commission filings.