Covad Saves Millions as Verizon Restructures Rates for Collocation Power in New York and Massachusetts.

Business Editors/High-Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--April 12, 2001

Verizon's operating subsidiaries in New York and Massachusetts recently eliminated the rate structure that tripled collocation power rates charged to Covad Communications (Nasdaq:COVD) and other competitive local exchange companies. The re-structured power rates start immediately and are expected to save Covad, the leading national broadband services provider utilizing DSL (Digital Subscriber Line) technology, millions of dollars in power charges. In New York state alone, Covad could save as much as $2.9 million annually.

"This is an important move by Verizon to discontinue the rate structure that tripled collocation power rates for Covad and other industry competitors in New York and Massachusetts," said Dhruv Khanna, Covad co-founder, executive vice president and general counsel. "Verizon's former rate structure increased the prices that competitive telecommunications providers like Covad pay for collocation power. We hope that Verizon will extend the re-structured power rates to all of the states in its territory."

Covad Chairman Chuck McMinn said, "This action by Verizon is another example of how we are looking at all aspects of our business to continue to reduce our costs. We have not let up the pressure on the phone companies to perform better."

Verizon's actions came in response both to a joint complaint of Covad and AT&T at the New York Public Service Commission as well as Covad's advocacy on Verizon's application to provide long distance service in Massachusetts. Covad also plans to seek refunds for past over-charges based upon Verizon's discontinued rate structure for collocation power.

About Covad Communications

Covad is the leading national broadband services provider of high-speed Internet and network access utilizing Digital Subscriber Line (DSL) technology. Covad offers DSL, IP and dial-up services through telecommunications carriers, enterprises, affinity groups, PC OEMs, application service providers, and Internet Service Providers that resell Covad DSL to homes and small businesses. Covad's other subsidiaries include Covad Business Solutions, which provides customized broadband solutions directly to small businesses, and Covad's Integrated Services (CIS) division, which enables companies and organizations to become virtual Internet and broadband service providers. 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, CA 95054. 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 statements concerning Covad's ability to become profitable, plans to expand its network, market opportunities, the cost, timing and scope of the deployment of Covad's network and launching of its services, Covad's ability to recover past amounts paid to local exchange carriers, implementation of line sharing and self-installation, anticipated capital expenditures, expense reductions and other operating results, and the success of strategic relationships. 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.