DSL Networks files suit against Covad
02/14/2001 1:46:00 AM MST Albuquerque, Nm
By Dustin D. Brand; Owner AMO
Covad after shutting down DSL Networks is being sued.
On February 7th, 2001, Covad shut down all of DSL Networks customers using Covad. Covad did this because DSL Networks, although receiving their customers bills and payments, choose not to pay Covad and was way overdue. Covad however did not shut down the customers DSL Lines, and instead contacted them about switching to Covad or another one of Covads' reseller ISPs to have their DSL back up. Although this is perfectly legal for Covad to do, DSL Networks is crying all the way to court filing an injucntion today on the 14th of February, Valentines Day.
Covad recently laid off about 400+ employees in an attempt to reach profitability. Covad has also been shutting down their DSL access to the various ISP resellers who did not pay their bills. In fact after a filed profit of 78+ Million, only 68 Million were received by Covad.
According to sources inside of DSL Networks, a few employees are gathering data from the inside to mount another lawsuit aimed at DSL Networks. Many employees, and former employees of DSL Networks are aware of various illegal activites that DSL Networks conducted, including illegally funnelling money out of the company and into the CEO's hands. You can read several of these speculations at DSL Reports.
Even with DSL Networks' suit against Covad, it is unlikely that DSL Networks will survive as a company. After Covad cut their DSL lines, and did so legally, DSL Networks was left in the position of not providing service to these thousand + users, and these users are not happy. Whether they're upset with Covad, or DSL Networks who they pay is irrelavant. These users have cancelled their accounts with DSL Networks, and even though their contract says to pay $250 for each cancellation before the contract date, it is impossible for DSL Networks to collect this.
DSL Networks has also laid off several employees, and it is unlikely that they will be able to survive much longer without filing Chapter 11, or even being shut down by the government for questionable if not illegal business practices.
DSL Networks enterprise customers included Microsoft, Fox, and other heavyweights. I'm glad to report to you however that it is unlikely that any of these bigger customers will stick around.
DSL Netoworks, Inc
Covad Communications, Inc