MCI to offer Covad DSL

MCI and Covad announced a line splitting agreement this week, allowing MCI to expand its consumer and small business voice and data bundles to Covad’s 1800 central offices.

The deal is one of many Covad has announced in recent months since the FCC’s Triennial Review made it clear that line-sharing would become a thing of the past. Much of Covad’s business depended on separating the data frequency from the standard POTS signal of a typical copper pair, allowing customers to designate a different DSL provider from their voice provider.

Since the FCC’s preliminary order came out earlier this year, Covad has been working relentlessly with its major competitive customers to tie up partnerships, in which it handles the DSL side of the business while leaving its CLEC partners to provision the phone lines and handle the voice aspects of the service under the unbundled network element platform.

With MCI now a major partner, Covad has the two largest consumer CLECs in the country buying its wholesale data lines. Covad announced a similar deal with AT&T this summer along with several other smaller partnerships. Andy Lockwood, Covad’s vice president for strategic partnerships, said to expect more line-splitting announcements in the coming months

Faced with bundling pressure from the RBOCs, which have glossed up long-distance and local voice packages with data, the IXCs have started taking DSL seriously. The result has been an avalanche of new bundling announcements across the industry this year some even encompassing wireless and satellite programming services.

“We believe that half the DSL sold in this country will soon come as part of bundle,” Lockwood said. “That’s a big opportunity for carriers and for Covad.”

Of course, most of that DSL will be going to consumers’ homes, a segment that doesn’t have the greatest profit margins, as opposed to the business sector where Covad previously concentrated. But Lockwood said the value will come in the sheer volume of orders Covad expects to receive as it partners with more carriers and those carriers ramp up their DSL plans.