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To: Boplicity who wrote (4767)	9/11/2000 8:58:58 PM
From: Boplicity	Respond to of 13572

Slow down over capacity my foot. I don't believe it! <<Covad shares shoot up on DSL deal with SBC SANTA CLARA, Calif., Sept 11 (Reuters) - Shares of Covad Communication Group Inc. <COVD.O> jumped 11 percent on Monday after the fast Internet access provider announced a flurry of deals, including a $600 million pact with rival SBC Communications, the No. 2 local U.S. phone company. Covad, whose shares have been hovering near its year low of $13-5/16, jumped $2 to $20-3/8 after it announced the six-year deal to provide SBC customers with DSL, or digital subscriber line, service that enables broadband, or fast, Web access. The companies also said that several pending antitrust and regulatory issues between them were settled, and that they had worked out technical details such as line sharing and remote terminal access. SBC would also invest $150 million to buy a 6 percent stake in the Santa Clara, Calif.-based company. Earlier in the day, Covad said that its installed base of subscriber lines would hit 200,000 by the end of the third quarter, beating Wall Street expectations of 30 percent growth. Using regular copper telephone lines, DSL is an alternative to other high-speed Internet services such as cable modems and satellites. Companies offering DSL service must contract with telephone carriers for use of their networks. And after the market closed, Covad followed up the SBC deal with an announcement that it was entering the convertible bond market with plans to sell $500 million of five-year notes and use the funds mainly to bankroll network expansion. A convertible bond is a hybrid security that usually offers current income, and be eventually converted into company stock. Its fortune is tied closely to the underlying stock price. Covad trading volume of nearly 28 million shares was five times its daily average volume and was the fourth highest on the Nasdaq. SBC shares rose 5/8 to $45-15/16 on trade of 6.6 million shares. Covad stock is still well below its year high of $66-5/8 set back in March. The SBC deal buries the hatchet between the two companies, which earlier this year were embroiled in a several legal disputes. In May, arbitrators ruled that SBC unit Pacific Bell violated a contract to provide Covad space on its network, and ordered an award of $27.2 million. "This changes the market dynamics and demonstrates that customer demand for broadband is so strong that two industry leaders can set aside past disputes and cooperate to deliver DSL faster and to a wider range of customers," Covad Chief Executive Robert Knowling said in a statement. The deal came on the first business day after the Federal Communications Commission (FCC) last Friday approved a plan to allow San Antonio, Texas-based SBC to extend high-speed Internet access to most of its urban customers. The FCC approval will let SBC carry out its $6 billion plan to make DSL available to 80 percent of its clients by the end of 2002. However, the companies also said that nothing in the agreements would prevent them from competing against each other in any market. SBC also said it would offer in-region DSL through its affiliate, Advanced Solutions Inc. "Although we will continue to be vigorous competitors, this agreement allows us to work together to fulfill the exploding demand for broadband for both businesses and consumers nationwide," SBC Chief Executive Edward Whitacre said in a statement. SBC's investment would also give a cash infusion to Covad and allow it to continue rolling out its service, the companies said. >> Greg