Covad Offering Discount T1 Service

Covad is targeting small businesses with its new TeleXtend broadband service "using T1 technology" for $449 a month.

by Michael Singer of siliconvalley.internet.com [November 27, 2001]

Covad Communications (OTCBB:COVD) is making a comeback of sorts, but not in its traditional DSL space.

The Santa Clara, Calif.-based firm Monday unveiled TeleXtend, a high-speed Internet access service using T1 technology.

The service starts at $449 a month and is being pitched to small businesses. Covad claims the service allows companies of less than 100 employees to get Internet access at up to 1.5 Mbps with no distance limitations. In addition, Covad says TeleXtend is integrated into the company's network making it a good choice for quick installation.

"This really complements our current product line with additional broadband technology," says Covad Senior Product Manager Todd Kiehn. "We expect TeleXtend to be a popular choice for small businesses, whose broadband options will now be expanded at a cost-effective rate."

Kiehn says that previously, small businesses such as law firms and graphic design shops often could not qualify for certain SDSL (symmetrical digital subscriber line) bandwidths due to distance constraints or technical limitations such as bridge taps.

"I think the key won't necessarily be the bandwidth because a T1 is a T1, but the selling point will be the applications," says Kiehn. For example, you might have a three-person design team uploading huge graphic files for clients or a larger company, which needs it for the speed."

TeleXtend is also being offered through Pleasanton, Calif.-based MegaPath Networks, which signed Covad to its Pathways Partner Program earlier this month.

The service is currently available in Atlanta, Miami, Minneapolis/St.Paul, San Francisco and St. Louis. The rest of the country should be available by the first quarter of 2002.

The offering marks quite a turnaround for the struggling CLEC, which filed for Chapter 11 bankruptcy protection back in August.

But the company, which is one of the two largest independent national digital subscriber line (DSL) providers in the U.S., secured additional rounds of funding and began to improve its position through reduced monthly operating costs and increased customer acquisition.

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