AT&T, Covad Team on DSL

SANTA CLARA, Calif. -- AT&T and Covad today announced an extension of their current arrangement for residential digital subscriber line (DSL) service that will soon give consumers more choice for high-speed Internet access.Currently, Covad is provisioning AT&T-branded DSL service in targeted areas of the country to existing customers of AT&T Worldnet® Service, the company's consumer Internet service. Under this new agreement, AT&T will now pursue offering services using Covad's nationwide network, which covers more than 40 million U.S. homes and businesses in 96 of the top Metropolitan Statistical Areas (MSAs) across the United States, including San Francisco, New York and Chicago.AT&T also offers DSL service provisioned over its own facilities in several targeted areas of New York, Texas and California. The company also has a previous agreement with Covad to provide DSL services that AT&T markets to business customers in the 96 MSAs served by Covad's network."Broadband Internet access is a key element in the portfolio of services we want to offer consumers," said Kevin Crull, senior vice president, AT&T Consumer. "Collaborating with Covad greatly expands our options and geographic reach. It accelerates our progress, while allowing us to control spending as we build scale." In addition, Covad granted AT&T warrants to purchase a total of 3 million shares of Covad common stock, representing 1.3 percent of Covad's outstanding shares. The agreement covering consumer services runs through September 1, 2005. Other terms of the agreement were not disclosed. AT&T Corp.Covad Communications Inc.