Covad Improves T1 TeleXtend for Small and Medium Sized Businesses; Price Reductions and Promotional Challenge Offer Attractive T1 Alternative.

Business Editors/High-Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--June 3, 2003

Covad Communications Group, Inc. (OTCBB:COVD), a leading national broadband service provider of high-speed Internet and network access, today announced improvements to its T1 TeleXtend(SM) services.

Covad reduced monthly access costs on both its full and fractional T1 services by 8 percent to 15 percent on a one-year contract; with new monthly costs starting at $459. In addition to monthly savings, new customers receive free professional installation, a $450 savings, and up to a 15 percent reduction on customer premises equipment (CPE) from Covad's previous list prices.

"We understand that businesses are very cost conscious when purchasing broadband connectivity," said Pat Bennett, executive vice president and general manager of Covad Broadband Solutions. "Covad understands the needs of small-and medium-sized businesses, which is why we have made the improvements to our T1 TeleXtend offering. It now has minimal upfront costs, highly competitive monthly rates and dedicated 24X7 T1 technical support."

Additionally, Covad is making its T1 TeleXtend pricing hassle-free for the customer through the implementation of the "Right-Sized Pricing" guarantee. Covad will proactively adjust a customer's contracted monthly T1 TeleXtend access charge if Covad lowers its standard monthly rate on the service. "Covad wants to give our customers peace-of-mind that they will always receive the best possible prices from Covad, without the hassles of signing and re-signing contracts," continued Bennett.

Covad also is introducing the "Specialized T1 Service Team" hotline. T1 TeleXtend customers will now have access to a dedicated toll-free hotline with 24X7 live technical support. As a result, customers will experience little-to-no wait time when contacting a T1 professional technical support representative with questions or troubleshooting.

Covad's T1 TeleXtend averages 30 calendar days from order to install, which is up to two times faster than the industry standard offerings. Furthermore, Covad has a 99.99% service availability guarantee on latency and packet loss and a four-hour time to repair target. Customers may request service credits that will be applied against future bills if Covad fails to meet these metrics. Please see Covad's SLA at http://www.covad.net/legal/docs/CBS_CustomerPolicies_030403.pdf for further details.

For business customers who may already have a T1 service from another provider, Covad is offering a "Take the Covad T1 Challenge". This new promotion invites these businesses to try Covad T1 TeleXtend for 30 days, with no strings attached. If the business chooses to select T1 TeleXtend after 30 days, it can transition its service over to Covad's network with minimal disruption to its high-speed connectivity. If the customer is not completely satisfied with T1 TeleXtend within the 30-day "challenge" then Covad will refund all set-up costs and the initial monthly access fee.

"Small-and medium-sized businesses don't always get the prices, features and service they want when it comes to T1 services," said Pat Hurley, Broadband analyst with TeleChoice. "Providers who really focus on small and medium businesses, like Covad with its updated T1 TeleXtend package, can often better serve these businesses with offers truly tailored to their needs."

Covad's T1 TeleXtend services continue to offer priority routing on Covad's Network, simple online account management using Covad SMART, free basic email, Web hosting and ten hours of free dial-up access.

For more information visit http://www.covad.com

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, hosting, IP, dial-up services and bundled voice and data services directly through Covad's network and through Internet Service Providers, value-added resellers, telecommunications carriers and affinity groups to small and medium-sized businesses and home users. Covad operates the largest national DSL network with services currently available in 96 of the top Metropolitan Statistical Areas (MSAs). Covad's network currently covers more than 40 million homes and business and reaches approximately 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 executive vice president and general manager of Covad Broadband Solutions 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, future FCC rulemaking, the terms and interpretations of the decision announced February 20, 2003 by the FCC, 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, 2002 and the Quarterly Report on Form 10-Q for the quarter ending March 31, 2003, along with Current Reports on Form 8-K filed from time to time with the SEC.