COVAD TESTING ALTERNATIVES TO UNE-P, LINE-SHARING PLAYS

Covad Communications is beginning technical trials of a DSLAM-based POTS offering that could allow its customers an alternative to the difficulties of unbundled network elements-platform and line sharing-based plans as soon as early next year.

Covad's DSLAM supplier, Nokia, debuted a new POTS line card for its D500 IP DSLAM at the Broadband World Forum show in Venice, Italy, last month. The new card provides analog voice service, freeing non-facilities-based service providers from relying on incumbents for dialtone. It will allow Covad's customers to migrate the 19 million or so lines served by UNE-P — which are increasingly endangered by government regulation — to UNE-L, in which competitors rely on the incumbent only for the physical copper loop itself.

“This allows us and a lot of wholesale partners to get into the ILEC voice-replacement business,” said Jeff Ahlquist, Covad's vice president of product development, adding that Covad will deploy the new gear in success-based increments, rather than replacing all of its current DSLAMs.

In a speech to a Kaufman Brothers investor conference last month, Covad CEO Charles Hoffman said the company will conduct a technical trial of Nokia's POTS offering — Covad calls it “line-powered voice” (LPV) — with two partners this fall and will roll it out as a commercial service in the first quarter of next year. The move further strengthens Covad's presence in voice services when combined with its existing voice-over-IP (VoIP) offering, which the company already delivers in 42 markets. It expects to reach more than 100 markets by year's end. In fact, additional VoIP lines can be added to the LPV voice line using the high-frequency portion of the LPV loop.

“The ‘V’ in Covad now has teeth,” Needham & Company analyst Vik Grover wrote in a mid-September research note, assuming that the “V” stands for voice. “As the technology proves itself out, we believe [Wall] Street will realize that Covad's star is rising as the only national non-RBOC switching fabric that enables competitors to offer customers either analog voice, DSL, VoIP or a migration plan from analog to broadband.”

The new POTS cards don't share DSL's 18,000-foot distance limit, so Covad can use them to serve any customer wired to a Covad central office, which would boost the number of potential Covad customers by 40%. By Grover's calculations, that would give Covad about 80 million marketable homes for LPV in the U.S. LPV also works with the existing phones and inside wiring in homes today, which some VoIP platforms can't do. Being a line-powered DSLAM also has benefits.

“If the phone line is up, this product will be as well,” Hoffman said.

“We already have the DSLAMs in place in all the markets,” Hoffman told the Kaufman Brothers conference last month. “This is a new chassis and line card. It's pretty simple — same DSLAM, same [DSLAM] provider. We're now working through all the provisioning and billing, and software necessary to support that. That's why it's a Q1 05 thing and not a today thing.”

The LPV offering also gives Covad's ISP customers such as EarthLink a way to get voice and data service into homes without sharing the line with an incumbent, a feature that has become more relevant since line-sharing mandates were phased out in the FCC's triennial review order last year. Covad has forged its own private line-sharing agreements with some RBOCs, but they're not long lasting; the newest agreement signed by Covad and SBC last month expires in a year.