Covad, Verizon bury legal hatchet

Covad Communications and Verizon today announced that they had resolved long-standing legal disputes between the two companies, and that Covad has established new working relationships with Verizon and MCI Communications.

The announcement comes as Verizon prepares to complete its merger with MCI, which in the past used Covad as a wholesale provider of DSL lines. Outside Verizon’s franchise territory, Covad would still a major service provider to MCI, and now Verizon.

The lawsuit resolution involves both Covad’s anti-trust suit against Verizon, which claimed the incumbent was putting a price squeeze on competitors to drive them out of business, and Verizon’s 2001 lawsuit against Covad, in which it claimed the company had submitted hundreds of false trouble reports against Verizon.

Separately, the two companies said they have entered into new relationship agreements, expanding Covad’s existing commercial line-sharing agreement so that the company can provide its DSL services over lines being used by companies that resell Verizon voice services. Covad also now becomes a preferred provider of local access and network services to MCI’s DSL business customers.

“These agreements build a new, positive relationship with Verizon,” said Charles Hoffman, Covad president and CEO, in a prepared statement. “MCI has been a valued customer and vendor to Covad for many years. The agreements we are announcing today provide an exciting opportunity to grow our business with the combined companies upon closing of the MCI acquisition. MCI has a substantial customer base outside of Verizon's local footprint.”

“We look forward to a continuing relationship with Covad as a valued supplier and customer to MCI,” said Randal Milch, Senior Vice President and Deputy General Counsel of Verizon. “We are also pleased to begin this new chapter in the Covad-Verizon relationship.”

The Covad-Verizon legal squabbles had turned nasty early on, with Verizon claiming it had sworn affidavits from multiple Covad employees concerning false trouble reports and Covad insisting that Verizon was trying to drive competitors out of business.