New CLEC follows data to dollars: More competition comes to Bay area

Covad Communications, a new competitive local exchange carrier based in Santa Clara, Calif., will launch service in the Bay area this week without any pretense of winning over voice traffic from the region's other competitive local exchange carriers.

The CLEC's main business strategy, unlike that of most other carriers, will be focused entirely on digital subscriber line-based data services. Covad will launch its Telespeed service in about a dozen Bay area communities this week and is planning to offer the service in twice as many by early next year, said Chuck McMinn, president and chief executive officer of Covad.

The company will offer both ISDN DSL and asymmetrical DSL in four different services packages: Telespeed 144 (144 kb/s downstream and 144 kb/s upstream), Telespeed 384 (384 kb/s downstream and 384 kb/s upstream), Telespeed 1.5 (1.5 Mb/s downstream and 384 kb/s upstream) and Telespeed 1.1 (1.1 Mb/s downstream and 1.1 Mb/s upstream). The services will cost between $90 and $195 a month, plus installation.

Those prices do not sound amenable to individual consumers, but Covad is hoping the corporate remote local area network access and telecommuting crowd will be ready to pay for high-capacity data services. The Bay area fits this profile, with about 900,000 people in almost 300 communities having some form of remote LAN access.

"We think most people will want Telespeed 384 [ADSL]. The IDSL service will be for serving longer-distance loops and areas served by digital loop carriers," said Chuck Haas, vice president of sales and marketing. The company also will target Internet service providers.

The company is getting its ADSL equipment from Diamond Lane Communications and its IDSL from Cisco/Telesend. Covad also is evaluating DSL equipment from various vendors.

McMinn doesn't believe the company will lose any ground by focusing only on data at a time when many other carriers are seeking to become full service providers. "All the market growth is happening with data, not voice. The whole bundling philosophy is a strategy for the weak. People want to buy best-of-breed services, and getting a single bill is no reason to settle for a weaker set of services," he said.