DSL Networks denied injunction against COVAD

  02/16/2001 1:08:00 PM MST Albuquerque, Nm
  By Dustin D. Brand; Owner AMO

DSL Networks files suit against Covad
  Covad won a potentially nasty lawsuit filed against them on Wednesday by DSL Networks on Thursday. DSL Networks had sought a frivolous injunction against Covad claiming they were illegally using their customers' names to have them switch to Covad.

  On February 7th, Covad cut DSL Networks DSL lines supplied by Covad because DSL Networks didn't pay Covad and they were way overdue.

  "We are in a position right now where we need to make smart business decisions that will get us to profitability. Unfortunately, we can't fund other people's businesses," Covad representative Suluh Lukoskie said earlier in the week.

  Santa Clara, Calif.-based Covad first cut service to Internet Express and then shut off connections to DSLnetworks on Feb. 7. DSL Networks had about 5,000 customers on Covad DSL Circuits.

  In a letter sent by Covad to the DSL Networks customers, Covad stated: "... Covad's efforts to resolve the situation without affecting you, the valued customer, were unsuccessful,".

  Covad sells high-speed Internet connections to more than 250 ISPs, according to company officials. In October, Covad announced that a number of its channel partner ISPs were having trouble paying their bills, which was straining Covad's revenue.

  Covad's third-quarter financial results, released in October, showed that despite billing $78.1 million for the third quarter, only $66.7 million in revenue was recorded.

  Covad said it had been in payment negotiations with the two financially troubled ISPs for months prior to cutting service. Signaling that the move was not a temporary measure, Covad said it has also terminated the business partnership relations it had with DSLnetworks and Internet Express.

  Lukoskie said Covad hopes to carry through negations with the rest of the struggling ISPs to find mutually agreeable solutions.

  Covad Communications, Inc