Covad Introduces Enhanced Service Level Agreements for Business Customers.

Business Editors/High-Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--April 23, 2002

Focuses on What is Important to Businesses -- Guarantees for

Installation, Reliability, Service and Support

Covad Communications (OTCBB:COVD), the leading national broadband services provider utilizing DSL (Digital Subscriber Line) technology, introduced enhanced service level agreements (SLAs) for business customers in its direct and wholesale distribution channels. The agreements provide guarantees of 30 calendar days for installation of business-class lines, along with guarantees for reliability, service and support. Covad supports these SLAs from the customer site to the edge of the Internet, providing end-to-end protection for the customer throughout the Covad network.

"Covad listened to its wholesale and direct customers and developed service level agreements that provide high confidence in using Covad's services," said Abhi Ingle, Covad vice president of Marketing. "Our goal has always been to get customers up and running fast, keep their services running reliably and ensure a first-rate experience with their broadband connections. These new agreements are proof that we stand behind these commitments."

The agreements are effective immediately for Covad's direct customers as well as its wholesale Internet Service Provider (ISP) customers. Once Covad's SLAs were released, EarthLink, a Covad wholesale customer, announced the availability of new SLAs to its business-class DSL customers on April 16, 2002.

Installation Interval Guarantee -- Get Customers Up and Running Fast

Covad guarantees its business-class, second line installation within 30 days from the time the order is accepted by Covad. If the installation period exceeds 30 days, Covad will credit the customer 50 percent of the first month's recurring charge. Currently, Covad's average installation time is less than 20 days for business-class services.

Reliable Service and Support -- Keep Services Running

Covad guarantees monthly service availability and time to restore service in the event of a service outage on a per line basis instead of a monthly average. The per-line guaranteed uptime, or service availability, is 99.9 percent for TeleSpeed DSL services and 99.99 percent for TeleXtend T1 services. If the monthly service availability target is missed, the customer is eligible for a credit of three percent of the monthly recurring charge for each additional hour above the target they are down.

The new SLAs also provide time to repair guarantees. Covad guarantees to restore TeleSpeed DSL services within 24 hours of the reported outage and TeleXtend T1 services are guaranteed to be restored within four hours from the reported outage. If Covad does not meet these target repair times, the customer will be eligible for an additional 10 percent credit of the monthly recurring charge for each line not restored within the applicable time frame.

Network Performance Guarantees -- Ensure Quality Performance

Covad's network is maintained and optimized so there is minimal congestion and latency, or the data packet travel time through Covad's network. As a result, Covad now offers average network delay and delivery guarantees. The roundtrip guarantees for average network delay are 10 milliseconds for regional traffic and 140 millisecond for national traffic. For Covad's direct business-class services with an IP bundle, the round trip traffic guarantee is 110 milliseconds. Covad's average delivery target is successful delivery of 99.9 percent of all data transmitted through the Covad network, including ATM (asynchronous transfer mode) cells and IP (Internet protocol) packets.

If the network delay or delivery time to repair exceeds one hour, customers are eligible for a five percent credit of their monthly recurring charge. If the time to repair is two hours or greater, the credit increases to 10 percent.

Covad's SLA guarantees encompass end-to-end coverage in all parts of the network owned or managed by Covad, from the telephone box at the end user's location to the edge of the Internet. This includes the local loop leased from the phone companies.

"We recognize that businesses want to work with companies that stand behind their guarantees," said Ingle. "Covad's enhanced SLAs show that we are confident in our services and our network and that we are committed to making it easy for customers to focus on their business and not worry about their broadband connection."

Claims and credits will be processed based on a validation process that starts with opening a trouble ticket with the customer's ISP, which will get passed on to Covad. If the customer is using Covad's direct services, the trouble ticket will be opened with Covad. Upon receipt of the claim, Covad will investigate and validate all SLA claims. Appropriate credits will be issued on the customer's next bill.

Covad plans to provide a monthly Network Performance Report as an enhancement of its automated on-line service management system. This report will allow ISPs and end users to monitor the health of the Covad network. It is expected that this reporting capability will be introduced in the second half of 2002.

Customers can refer to complete descriptions, terms and conditions available on the Covad website at http://www.covad.com/businessservices/slas.shtml.

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: 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 the effectiveness of Covad's new SLAs, Covad's ability to produce a Network Performance Report, and the statements made by the vice president of marketing 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 raise additional capital and address its financial issues, 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.