Covad Deploys Automated Loop Ordering Process With GTE, US West, Ameritech and Southwestern Bell.

Business Editors/High-Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--June 30, 2000

Increased Efficiencies and Decreased Costs Expected With

End-to-End Ordering Process

Covad Communications (Nasdaq:COVD), the leading national broadband services provider of high-speed Internet and network access utilizing Digital Subscriber Line (DSL) technology, today announced that it has started deployment of a fully automated loop ordering process with four additional phone companies: GTE, US West, Ameritech and Southwestern Bell. Covad has been placing orders using the automatic loop ordering process with Pacific Bell since December 1999.

Electronically bonding the systems at Covad with these local phone companies' systems is expected to speed-up and simplify the installation of DSL lines at lower cost.

"The automated loop ordering process will allow Covad to more efficiently and quickly fulfill demand for our broadband services nationwide," said Vinu Sundaresan, vice president of Software Engineering for Covad. "Electronically bonding with the phone companies' systems is expected to decrease installation times and administration costs, which will benefit our operation, consumers and even the phone companies."

Covad believes it is the only provider to start deploying a true end-to-end, automated process for placing loop orders with the phone companies and it expects this process will lead to "zero-touch" installations. Unlike other DSL providers who place orders manually through their EDI systems, Covad's system will be completely automated to handle all transactions with each phone company including the flow of the order from the ISP through Covad's Operations Support Systems.

Electronic bonding will simplify DSL deployment and installation by enabling an automated flow-through between Covad, Internet Service Providers (ISPs) and the phone company without any human intervention by Covad. Without automation, Covad and the phone companies must manually process loop orders, which results in increased loop order processing costs, increased chance for error and delayed installation.

In Pacific Bell territory, which has been fully automated since December 1999, Covad has seen a 25 percent decrease in average installation time; a 50 percent reduction in average loop order administration costs due to no human intervention; a 70 percent reduction in average loop order costs paid to Pacific Bell; and a 90 percent reduction in the average time it takes to get a confirmation from Pacific Bell to deliver a loop for service. Covad expects similar results with the other phone companies as the efficiencies of the rollout are fully realized.

EDI based electronic bonding with the phone companies is a part of Covad's vision for end-to-end flow-through automation. This vision has resulted in the open and extensible xLink (pronounced "cross link") platform, an XML (Extensible Markup Language) based application interface, which was announced last year. Covad's xLink platform will enable ISPs and other Covad channels to pre-qualify, order, and provision Covad DSL services for subscribers in a fully automated fashion. Once a subscriber places an order online, the order will be fulfilled without human intervention all the way through provisioning the circuit on the network, ordering the loop with the phone company and scheduling a field technician to install the order. This platform makes it easier for ISPs to add DSL services to their product portfolios, and improves the overall scalability of DSL deployment.

Covad utilizes NightFire's(TM) SupplierExpress(TM) software to automate the loop ordering process with each of the phone companies throughout the U.S.

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 81 of the top Metropolitan Statistical Areas (MSAs). Once Covad's acquisition of BlueStar Communications is complete, Covad's services will be available in 100 MSAs. Covad services are expected to be available in 165 MSAs by the end of 2000. At that time, Covad's network will reach more than 45 percent of all U.S. homes and 50 percent of all U.S. businesses. Corporate headquarters is located at 4250 Burton Drive, 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, and our ability to decrease installation intervals, reduce administrative costs and scale our business. 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.