Covad, AT&T extend DSL agreement

AT&T and Covad have expanded their residential DSL service agreement under which Covad provisions AT&T-branded DSL service to include Covad’s entire nationwide network of more than 40 million homes in 96 of the top metropolitan statistical areas [MSAs]. AT&T previously worked with Covad to provide DSL to AT&T Business customers in those same 96 MSAs, and the carrier will continue to offer DSL service provisioned over its own facilities in several areas of New York, Texas and California.

AT&T and Covad first linked up last summer. This agreement reflects the fact that people are interested in moving to high-speed, said an AT&T spokesman. “This is a retention plan for AT&T Worldnet customers right now.”

The spokeswoman said that AT&T Worldnet will be developing specific high-speed offers for customers signing up over Covad’s networks, but, “we’re not ready to announce details of what the offers will be and how we’ll market those.”

Co-branding, in itself, is relatively unique for Covad, said President-CEO Charles Hoffman.

“We’re largely a wholesaler; 85% of our revenue comes from wholesale and most of those customers don’t know Covad is the underlying service provider,” he said. “That’s part of the price you pay for being a wholesaler.”

AT&T’s increased attention on the residential broadband space comes as the company moves into a new era minus its cable TV unit and its extensive high-speed Internet offering.

While the service will be pitched to AT&T’s long distance customers, it won’t be part of a local service bundle, the AT&T spokeswoman said, noting that the carrier is most interested in migrating dial-up Worldnet subscribers to broadband and Covad has “immediate access to 10s of millions of households.”

“Right now, with this Worldnet offer, it’s a data-only service, not a bundled service,” she said. “Local is a different thing.”