Covad signs line-splitting deal with Z-Tel

Covad Communications today announced it has expanded its DSL services agreement with voice CLEC Z-Tel to include line-splitting, allowing Z-Tel to bundle its local and long-distance services with data over the same line.

The deal is one of many Covad is expected to announce in the wake of the FCC’s triennial review, which determined that competitive carriers can no longer take advantage of line-sharing. Covad last week announced a similar deal with AT&T for bundling, and Covad officials said they would announces similar agreements in coming weeks. Despite the FCC impending ruling, Covad said that its commitment toward line-splitting partnerships is not merely a reaction to regulation.

“It’s not that we’ve artificially created this market to escape the FCC,” said Andy Lockwood, executive vice president and general manager for Covad strategic partnerships. “We’re taking advantage of an already existing market. The market is very much moving toward bundling.”

Covad began upgrading its networks at the beginning of the year, installing splitters in all of the central offices in which it’s DSLAMs are co-located. After it finished the deployments, it began negotiating contracts this summer. Most of its carrier wholesale customers eventually must start offering voice services over their leased lines, but Lockwood said that most of the industry is beginning to see the value in the voice/data package and are going along willingly, either installing their own switches are buying voice services from other carriers.

“People like AOL and Earthlink aren’t in voice now, but they’ll have to go there because the market will demand it, not because the FCC requires it,” Lockwood said.

Covad itself plans to stick entirely with data services, it’s area of specialty, and use its partners for voice capabilities, Lockwood said.