Covad Granted Court Approval to Migrate Flashcom Customers Through Covad's Safety Net Program.

Business Editors/High-Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--Feb. 22, 2001

Covad Approved to Seek Migration Requests From Approximately

24,500 Residential and Small Business Flashcom Customers

Covad Communications (Nasdaq:COVD), the leading national broadband services provider utilizing DSL (Digital Subscriber Line) technology, today announced that the United States Bankruptcy Court in Santa Ana, Calif., approved its offer to purchase all of the Covad supplied Flashcom DSL customers for a combination of cash and debt forgiveness. Covad will provide up to $750,000 in both cash and debt forgiveness up front, and could pay up to an additional $2.75 million more depending on how many Flashcom lines are successfully migrated through the Covad Safety Net program.

The transaction allows Covad to seek migration requests from approximately 24,500 Flashcom DSL customers who may have faced losing their broadband connections. Flashcom, one of Covad's distressed Internet Service Providers (ISPs), filed for bankruptcy protection on Dec. 8, 2000, and has the largest number of DSL lines among the distressed ISPs. Beginning this week, Covad will start to seek migration requests from Flashcom's customers through Covad Safety Net, the program that migrates end users of distressed ISPs to an ISP participating in the program or to Covad.net.

"This is great news for Flashcom's customers who want a simple way to transfer their Covad DSL to another Internet service provider," said Chuck McMinn, Covad chairman. "Our negotiations were successful with Flashcom because we share a common goal of reaching a mutually acceptable business resolution that also allows end users to keep their broadband connections up and running."

Introduced on Dec. 11, 2000, Covad's Safety Net program was established to help customers of financially distressed ISPs maintain their DSL connections.

"We remain fully committed to working with distressed ISP partners to get payment and find solutions for their customers," continued McMinn. "Unfortunately, after lengthy negotiations with some of our distressed ISPs, we were forced to turn-off their connection to Covad's network. Because we could not reach an agreement with these ISPs and they did not pay their bills to Covad, the end users of these ISPs have unfortunately experienced a disruption or termination of their DSL connections. Flashcom is a great example of how an ISP and Covad can negotiate an agreement to minimize the impact on innocent end users."

By clicking on the "Safety Net" button on Covad's website (www.covad.com), end users, including those who have already experienced service disruption, can quickly learn if they qualify for the program. If end users qualify and elect to participate in the Covad Safety Net program, they will be guided through the migration process with minimal disruption to their broadband connection. Starting today, Flashcom end users will receive emails and letters directing them to the Covad Safety Net program for a plan to transition their broadband connections with little to no loss of service.

About Covad Communications

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 109 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 4250 Burton Drive, Santa Clara, Calif. 95054. Telephone: 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 migrate end users of distressed ISPs, plans to expand its network, market opportunities, the cost, timing and scope of the deployment of Covad's network and launching of its services, implementation of line sharing and self-installation, anticipated capital expenditures, expense reductions and other operating results, success of strategic relationships, and the statements made by the chairman in this release. 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 successfully market its services to current and new customers, the consolidation of sales to a fewer number of wholesale customers, Covad's ability to generate customer demand, to achieve acceptable pricing, to respond to increasing competition, to manage growth, to receive timely payment from our Internet service providers and other 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. All forward-looking statements are expressly qualified in their entirety by the "Risk Factors" and other cautionary statements included in Covad's SEC filings.