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Covad Set To Emerge From Bankruptcy

Hemos posted more than 12 years ago | from the yahoo-my-dsl-will-stay dept.

The Internet 94

powerlord writes "All of us still rooting for Covad can let out that deep breath we've been holding. According to an article on the Seatle IP Wire Covad is set to emerge from bankrupcy. They claim they've managed to shed most of their debts and are concentrating on 50 major metropolitan areas right now. They expect 40 of the markets to be cash positive by year end, with the entire company cash positive by mid 2003. Their stock rose $0.75 to $1.39."

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94 comments

First Fog Post (-1)

Fecal Troll Matter (445929) | more than 12 years ago | (#2705254)

Wooo, wet, foggy, and rainy in NY today.

Re:First Fog Post (-1)

Fucky the troll (528068) | more than 12 years ago | (#2705364)

What temperature is it?

How would I go about buying a H&K MP5K. You wouldn't happen to know would you?

Re:First Fog Post (-1)

ArchieBunker (132337) | more than 12 years ago | (#2706064)

Your nearest black market guns runner of course. I'd rather have a .50 cal BMG myself. Take out jeeps from over a mile.

YOU STOLE THAT FROM ME BITCH!!! (-1)

GaylordFucker (465080) | more than 12 years ago | (#2705417)

I posted that in the last story post you blatant sexual asspussy!!!

Glad to hear this (2)

phillymjs (234426) | more than 12 years ago | (#2705256)

...since I'm about to make the switch from @Home to Comcast's own cable modem service. If it turns out to suck, now I'll have a viable alternative to Verizon DSHell.

~Philly

We're number 2 (-1)

DivineOb (256115) | more than 12 years ago | (#2705259)

Rape a kike, fuck a jew

You (-1, Offtopic)

Anonymous Coward | more than 12 years ago | (#2705312)

are a dumbass.

Re:We're number 2 (0)

Anonymous Coward | more than 12 years ago | (#2705433)

No way, they smell like gifelte fish.

You (0)

Anonymous Coward | more than 12 years ago | (#2706205)

are also a dumbass.

Congrats, but (5, Insightful)

Erasei (315737) | more than 12 years ago | (#2705264)

I worked with a company that partnered with Covad a few years ago. With any past partner, you wish them the best, and hope they do well as a company.

But the reason (well, one of the many) reasons they went bankrupt in the first place was the old problem known as 'the last mile'. In the DSL world, the telco still has to be involved. So, how can a company like Covad, basically a reseller, expect to survive against the telco selling DSL themselves?

Reselling CAN be profitable. (4, Insightful)

Tsar (536185) | more than 12 years ago | (#2705370)

So, how can a company like Covad, basically a reseller, expect to survive against the telco selling DSL themselves?
One word—volume.

All kidding (well, most kidding) aside, I recently saw an article [isp-planet.com] referenced on DSLReports [dslreports.com] that makes an excellent point—in general, DSL customer service sucks. Installation can be time-consuming without a guarantee of eventual success, service is occasionally spotty, and online help can be hit-or-miss. Work-at-home folk who depend on their broadband for their livelihood, as well as those of us who are just willing to pay a bit extra for good service, would likely do business with a reseller who would wrap a telco's DSL line in better support for a slightly higher monthly fee.

On the other end of the spectrum, a reseller could purchase DSL service wholesale and provide stripped-down service (no email, Usenet, or toll-free support) for less than the full-service products offered by the telco. Many of us geeks would go ga-ga for such a service, especially if all extra services (such as static IP's) were offered a la carte.

Proud owner of a self-restored 1968 Ford Fairlane, 302 V8, 9" 4.11 geared...
Self-restored? Wasn't this the setup for a Stephen King novel?

Re:Reselling CAN be profitable. (1)

Error629 (528269) | more than 12 years ago | (#2705405)

I think the real money comes in being acquired by Earthlink, eventually. :)

Stephen King (0)

Anonymous Coward | more than 12 years ago | (#2705522)

Christine was a 1958 Plymouth Fury.

Re:Stephen King, author, dead at 55 (-1)

I Have a Hard (538104) | more than 12 years ago | (#2705570)


I just heard some sad news on talk radio - Horror/Sci Fi writer Stephen King was found dead in his Maine home this morning. There weren't any more details. I'm sure everyone in the Slashdot community will miss him - even if you didn't enjoy his work, there's no denying his contributions to popular culture. Truly an American icon.

Different packages (2)

sterno (16320) | more than 12 years ago | (#2705588)

This is real simple for me. The best upstream bandwidth I can get through the local phone carrier is 128Kbps. I can get more, but then I have to pay for business class service which is WAY beyond what i need both in price and services.

I've been using Covad's services for two years now and they provide what I want. I've got 384Kbps up which is sufficient for most of my uses. Also, they have no stupid regulations about what I can and cannot do with my connection. Now I grant that when I move next I'll have to get a different service package because their default upstream is going to 128Kbps now, but at least the options are their without being exhorbitant.

Re:Different packages (2)

KelsoLundeen (454249) | more than 12 years ago | (#2705829)

I second this: Covad DSL seems -- at this point, at least -- much better than nearly any alternative.

I've got a 1500/384 pipe, absolutely *no* restrictions on servers or bandwidth, up to 10 IP addresses, no funky PPPoE, and access to a shell account. (Plus I'm going through Speakeasy's Chicago POP, so my pings are -- and have remained -- remarkably low for stuff like Quake.)

Yeah, it's a little pricey -- 75+ bucks a month (more because I have several IP addresses) -- but I'd always said that I'd be willing to pay a bit more for decent service, and so far Covad has given me superb service.

Kudos to Covad. As a former Telocity/Rhythms customer, I'm glad to see that out of the Rhythms/Northpoint/Covad group there appears to be at least one (possible) survivor.

Besides, there's no way in hell I'd give another penney to AT&T or Ameritech. I'd go back to a 56K if AT&T or Ameritech were my only DSL/Cable choices. (Although I'm worried about the DirecTV/EchoStar proposed merger, but that's another thread, another day ...)

Kelso

Re:Different packages (2)

joshv (13017) | more than 12 years ago | (#2705914)

With great reluctance, after failing in two other attempts to get other providers to come out and install DSL in my apartment, I decided to go with Ameritech DSL when I moved into a new place.

Other than the fact that they sent me a USB modem instead of the Ethernet version (quickly corrected) service has been excellent and bandwidth consistantly high and reliable.

I was rather surpised, until I realized it wasn't really the old Ameritech (which had managed to roll out DSL to several thousand subscribers in Michigan in 3 years), this is SBC, which has a much better record in the DSL marketplace.

It's good service and I know SBC is not going anywhere anytime soon Granted I don't have quite the speed you do, but maybe offering such speed is one of the reasons Covad went bankrupt in the first place.

-josh

Re:Different packages (2)

MrResistor (120588) | more than 12 years ago | (#2706240)

I've been very happy with SBC as well (through Pacific Bell). I've had their service for over 1.5 years, and I've had only one problem (which turned out to be my NIC going flakey) and their customer service and tech support have been excellent.

Re:Different packages (1)

nsushkin (222407) | more than 12 years ago | (#2705933)

You're lucky, unless you have to move soon.

The reason is that unfortunately, the 1500/384 package is now only available directly from Covad. Speakeasy stopped offering it and now their maximum ADSL upload speed is only 128.

1500/384 from Covad is PPPoE based.

Re:Different packages (1)

linzeal (197905) | more than 12 years ago | (#2706262)

http://www.speakeasy.net/low/rescompare

That really sucks. I can't justify ~150 bucks a month for good up bandw.

Spelling Error: It's Bankruptcy (1)

Milican (58140) | more than 12 years ago | (#2705267)

Bankruptcy [dictionary.com]

Spelling police.. sounding off.

JOhn

Re:Spelling Error: It's Bankruptcy (-1)

GaylordFucker (465080) | more than 12 years ago | (#2705452)

it's slashdot... what do you expect

i really think the next version of slashcode should include a spellchecker for slashdot specifically... or if you're smart... you'd use phpnuke... they already have that feature available :-)

This is great news (4, Informative)

bconway (63464) | more than 12 years ago | (#2705271)

As a user of SpeakEasy.net [speakeasy.net] , one of the few good DSL providers left who don't use the broken-by-design PPPoE protocol, I'm definitely relieved to hear that Covad will be sticking around for a while. SpeakEasy assured all of their customers that in the event of Covad going under they would provide service by some other means, though that's always questionable at best. Great job, guys!

PPPoE sucks donkey balls (0)

Anonymous Coward | more than 12 years ago | (#2705287)

And this is why I (working for another, anonymous Covad ISP) refuse to use it. Glad to see customers agree!

Re:This is great news (3, Funny)

Syberghost (10557) | more than 12 years ago | (#2705295)

one of the few good DSL providers left who don't use the broken-by-design PPPoE protocol

Now, let's be fair; they haven't finished designing it yet, so maybe it won't be broken if they're ever done. :-)

Re:This is great news (1)

WillSeattle (239206) | more than 12 years ago | (#2705301)

Must agree, Speakeasy [speakeasy.net] is a great DSL provider, just as Drizzle [drizzle.com] is another one I recommend to cool people in Seattle who got burned by @Home.

And we should note that we'll all miss the Speakeasy cafe that burned down in that fire - luckily most of their servers were in another location so their network never dropped.

As we suffer through the dot com crashes, it's nice to see some of the good guys surviving.

-

-

Re:This is great news (2)

cmowire (254489) | more than 12 years ago | (#2705386)

The backup plan, of course, is for Speakeasy to just buy lines from the phone company directly.

At least, I hope. I hope that in 5 years, there is still an ISP that will let you have static IP addresses and servers for a reasonable premium over normal rates. I love my speakeasy connection. If Covad sticks around for a while longer and is profitable, I'll do what I intended to do a while back and start hosting my own services, instead of paying for an ISP.

Of course, Covad is becomming part of the phone company by partnering with SBC.

Re:This is great news (1)

Error629 (528269) | more than 12 years ago | (#2705422)

SBC owed them hundreds of millions of dollars. why not get a cash infusion from SBC that was owed to them anyway?

Re:This is great news (2, Informative)

nicedream (4923) | more than 12 years ago | (#2705451)

I am very satisfied with my DirecTV DSL (formerly Telocity).

I get a static IP and I am allowed to run anything I want, no firewalls, no port blocking.

$50/month. I couldn't be happier (especially since I live 2 blocks from the nearest DSL switch).

Re:This is great news (2, Informative)

rekoil (168689) | more than 12 years ago | (#2705805)

Depending on the LEC involved, this is not as easy as it seems, and you really have to understand exactly what Covad does to understand this.

Covad is NOT and ISP, they do the dirty work of connecting ISPs to DSL end users. They do this by colocating their DSLAM hardware in the LECs' central offices, which the LECs are required by law to allow them to do at prices typically set by the state PUC. Covad then provisions residential lines from the LEC, having them terminate into their DSLAM instead of (or in addition to, via a signal splitter) the LEC's own POTS switch. From there, Covad connects the DSLAMs into their switched ATM network, which Covad's client ISPs also connect circuits into. Covad then routes the data streams from the ISP to the end user and back.

Some LECs, most notably SBC, have a similar service, although not offered in all areas. In this case, the ISP can, and does, order connectivity to the end user directly from the LEC. However, Verizon doesn't do this, so without Covad (or Northpoint or Rhythms, pre-crash), the ISP would be forced to colocate DSLAM hardware and provision trunk circuits into every LEC central office in the area they wish to service. This, as you might expect, is extremely expensive, and few ISPs can achieve the per-DSLAM customer density to make it remotely profitable, epecially low-margin ADSL customers.

In the Washington DC area, only Network Access Solutions [nas-corp.com] is taking this route, to the best of my knowledge. They only offer business-class SDSL service, which is premium priced, and probably the only was NAS can hope to recover the cost of putting a DSLAM in every CO in the area.

Re:This is great news (2)

cmowire (254489) | more than 12 years ago | (#2706452)

Thanks for the clarification.

I do know that in some markets where there are no good DSL providers, you can IP tunnel through another ISP just to get the IP address.

Of course, that's an awful hack. ;)

Re:This is great news (1)

linzeal (197905) | more than 12 years ago | (#2706276)

"At least, I hope. I hope that in 5 years, "

I hope in 5 years to be using a fatter, cheaper, more robust pipe than DSL. What about you?

Re:This is great news (2)

cmowire (254489) | more than 12 years ago | (#2706360)

So do I. ;)

But I hope that I'll be able to do it while being able to have FTP, VNC, HTTP, and STMP servers.

petty whining (2)

toast0 (63707) | more than 12 years ago | (#2708900)

thats smtp you mean... simple mail transfer protocol...

unless theres something useful by the name of stmp?

also, ftp is bad!, you want ssh, seriously. ignoring security issues, ftp has an old and cludgy network setup that doesn't work too well when firewalls are involved

Re:This is great news (2, Interesting)

automatic_jack (181074) | more than 12 years ago | (#2705473)

I use SpeakEasy too. After getting burned by Flashcom and their HORRIBLE service, Speakeasy has been a dream come true. Four static IPs, a 384kbit pipe, and dialup to use when the high-band is down, although the only times that has happened have been when FUCKING VERIZON PIECE OF SHIT TECHS unplug us.

I live in an apartment building, and twice in the last year our DSL has died. When Covad comes to look at it, the first time the wire was unplugged from the block, and the second time it was unplugged and actually cut, in three places. Apparently Verizon techs will cut Covad wires if they see them, because the Covad guys are not union. The second time this happened we had to pay $200 for repair. ARGH!

Re:This is great news (1)

jmauro (32523) | more than 12 years ago | (#2705479)

Why is PPPoE broken-by-design? It works just like its supposed to.

Re:This is great news (0)

Anonymous Coward | more than 12 years ago | (#2705965)

PPPoE incorrectly mungs all MTUs. It breaks NAT or any routing for that matter, leading to latency losses, bandwidth drops, and lost connections. It's _just_ _plain_ _broken_. Go do some reading, eh? And no, I don't care if you haven't experienced any problems yet.

speakeasy owns j00 (2)

Perianwyr Stormcrow (157913) | more than 12 years ago | (#2706228)

I was lucky enough to start out with a pretty brilliant DSL ISP (CapuNet) who were pretty damn awesome, but when they dumped residential service (seemingly like all others in my area) I had to go somewhere. The somewhere CapuNet offered me was the craptastical Earthlink, which I had no intention of climbing aboard. So, I looked into Speakeasy, and it seemed like that was the solution for me... and time has certainly proven this.

It doesn't hurt that a good half of my favorite shoutcast stations are now hosted by speakeasy... heh heh. Now all they need is a good goth station.

This is really good news. (3, Interesting)

Anonymous Coward | more than 12 years ago | (#2705272)

Posting as AC for a reason.

I work for a Covad ISP and we have had to deal with major hassles for the last year or so in keeping our customers happy and buying despite the obvious uncertainty surrounding their finances. (The collapse of the other vendors - Northpoint, Rhythms, et al. didn't help.) When they finally did announce bankruptcy and the deal to get their affairs in order, we all breathed a sigh of relief - but still held on for dear life until the thing was completed.

Through all this, they have kept service levels very high. I'm quite impressed.

Seattle P-I or Post-Intelligencer - correction (2, Offtopic)

WillSeattle (239206) | more than 12 years ago | (#2705273)

geesh, Hemos, it's even spelled out in the URL [nwsource.com] .

The reason I mention it is the Seattle Times [nwsource.com] is a fascistic dishrag that backs Bill G without question, and both it and the Post-Intelligencer are morning papers now. Plus the P-I is even older - I work in their old building, which is now a Group Health admin center for us techies.

As to the story, one of the things about Covad and bankruptcy is that this shows us why Chapter 11 and Chapter 7 are very different. The former means you're going to come back like a phoenix, the latter usually means it's time to drive a stake thru your heart.

-

Re:Seattle P-I or Post-Intelligencer - correction (1)

rekoil (168689) | more than 12 years ago | (#2705583)

Not necessarily - @home, Northpoint and Rhythms all filed Chapter 11. Northpoint and Rhythms both amended the filing later to Chapter 7, which mandates the company more or less shut down upon filing, IIRC. @home will do the same when they cease operations.

Re:Seattle P-I or Post-Intelligencer - correction (0)

Anonymous Coward | more than 12 years ago | (#2706142)

Chapter 7 is a personal bankruptcy, not available to companies. Chapter 13 is liquidation, which is what the Chapter 11 filings would have been converted to. It's not "more or less mandated", shutting down is what filing chapter 13 means.

PI v. Times (1)

quistas (137309) | more than 12 years ago | (#2705898)

That's a little simplistic -- the Times is a family-owned facist fish-wrapper, while the PI is a Hearst-owned more moderate (but hardly liberal) bird cage liner. Neither really represents the spectrum of the area's political views or does enough to go after the entrenched corporate welfare that goes on in this town.


-- q

New Jersey (2)

jpostel (114922) | more than 12 years ago | (#2705276)

I just hope they come back to the central NJ area. There are a ton of my clients that are itching to get better ISPs.

Re:New Jersey (0)

Anonymous Coward | more than 12 years ago | (#2705476)

You guys probably have Optimum Online in the NJ area? You got to give them sometime because optimum just rolled out their cable service in NJ and CT just recently. Give it another year or so and you guys will have a stability in the area. I'm guessing within a few years all of NJ will be hooked up via cable connection.

no i'm not an Optimum Online employee ;-)

Why Slashcrap is really turning to a pile of shit (-1)

KingAzzy (320268) | more than 12 years ago | (#2705278)

I had a CONSTRUCTIVE COMMENT to add but the FUCKED UP LAMENESS FILTER CRAP made it all blow chunks all over itself!!! What a piece of shit!!!! Faggot Malda must learn that he cannot fuck with people like tihs and get away with it! He and his homosexual sycophant horde will pay. They will pay!!!

Re:Why Slashcrap is really turning to a pile of sh (0)

Anonymous Coward | more than 12 years ago | (#2707370)

And yet it let this post of yours through.

Too little too late (3, Interesting)

AntiPasto (168263) | more than 12 years ago | (#2705279)

As someone who lost their job (and one that I really really liked too) because of the bankrupcy, I'd just like to say that this is nice and all, but what are we to learn about emerging markets?
We were a reseller, and well, perhaps we jumped into it soon, but heck, we couldn't compete with cable, and DSL was the first to offer a sales chain so that we could keep our customers. We lost our customers, so they had to let me go (the reprovisioning person!!! hehe ah well).
The big bells still have DSL by the balls (I mean, after all it is their stuff, and they get support/technical/installation priority), so is small business connectivity provisioning going towards the relm of the phone/cable companies?

Re:Too little too late (1)

Random Feature (84958) | more than 12 years ago | (#2706147)

Cable companies are too restrictive with their services, even in the business connectivity arena. Up in NE WI if you get business class you get a router. Fine. But guess who manages it? That's right, the cable company. You can't touch it.

Now for mom and pop shops, maybe that's kosher, but for me - no way.I want to manage my own network - not let someone else do it. But let's say you agree to this. Next you get to pay $30-40 more per month for what - a better router and an IP address. Not better service, not more bandwidth, not even a guarantee on bandwidth - just an IP address and a stinkin' router. That's bs.

DSL is still the best option for guaranteed bandwidth and the ability to manage your own network - at least in these parts. And unfortunately, the DSL providers around here are dropping like flies.

Re:Too little too late (1)

linzeal (197905) | more than 12 years ago | (#2706297)

Wait wait...

They leave a port open to the outside world on a router and don't give you a password or login for it? We had this at *BC (guess the first letter) and 3 times out of 10 some fucking IP tech didn't take the time to configure the Cayman correctly before he gave it to the customer. So it would work and the install tech didn't really care, but for months even up to a year the router would sit there with the default username and password like numerous others on that same ip block. Frigging scary stuff.

Amazing! (3, Insightful)

chill (34294) | more than 12 years ago | (#2705284)

"Covad said it has learned from the past and will not expand until it can afford it. Currently, its service area is focused on the top 50 metropolitan areas in the United States.

By the end of this year, 40 of Covad's 50 operating areas will be profitable. The entire company is expected to be cash-flow positive by the second half of 2003."

Amazing that a "new economy" company is now focusing on earning and profit instead of growth. Who'd a thunk it.

Amusing irony on their site (1)

InterruptDescriptorT (531083) | more than 12 years ago | (#2705289)

Check out their Web page:

Program to help customers of distressed ISPs maintain broadband service

...yet were they not one of those very distressed ISPs before this resurrection? What happens if they go down? They provide their service to their... previous... customers whom they cut off? Ach, it's all too recursive for me. ;-)

Well, I thought it was funny...

Re:Amusing irony on their site (0)

Anonymous Coward | more than 12 years ago | (#2706917)

With the exception of the direct sales covad.net department, Covad is a dsl wholesaler, not an ISP. They sell dsl service to retail ISPs such as Speakeasy and Earthlink. So no, they were not a distressed ISP, they were a distressed wholesaler. Get it right.

Was debt the problem? (3, Insightful)

ManualCrank Angst (541890) | more than 12 years ago | (#2705293)

I thought the problem was the telcos screwing them over with feet-dragging. Unless bankruptcy (please note the spelling) has changed since we covered it in Social Studies, it doesn't force other businesses to start playing fair.

Debt WAS the problem (3, Interesting)

Anonymous Coward | more than 12 years ago | (#2705358)

These guys ridiculously overexpanded; sent huge rebate checks to customers who signed up for service; spent tons of $$ on advertising; failed to get operational costs under control; and generally burned a billion dollars. (Yes, Virginia, billion.) Bankruptcy gave them a second chance that was much better than the alternative of liquidation. The ILECS contributed to the fuckups but were by no means the sole source.

Re:Was debt the problem? (3, Informative)

Error629 (528269) | more than 12 years ago | (#2705392)

I work with Covad, and a big part of it is is their lineshare ADSL Customer base, SDSL and IDSL through them are fine. They lose customers who have ADSL on lineshare, because if the phone line starts having problems, the ILEC's rarely fix it, since they aren't providing the DSL. Even if the customer has had it for a year through Covad, they've lost a customer. So yeah, I guess that amounts to your customer base getting screwed by the LEC's. :/

Re:Was debt the problem? (1)

linzeal (197905) | more than 12 years ago | (#2706316)

Yeah but the telcos will bend over backwards and suck shit out of their ass for their own DSL customers? We had a single linetap causing intermittent connectivity for my entire apartment building 300 + units and it took the phone company 6 months to fix it. They are so disorganized and careless its not even funny. I was working for the parent company of pacbell in 99 when they had the California "crisis" where 30,000 people a month were signing up for DSL and it took ~2-3 months a peice for them to get on. IF there were any problems they offered to disconnect the service not give you a month free. Chaos Choas. Bloated dot com riches in their eyes caused them to do moronic things.

Re:Was debt the problem? (3, Informative)

rekoil (168689) | more than 12 years ago | (#2706007)

A lot of lawsuits and state PUC rulings have gone a long way into improving this picture. I remember reading an article a few weeks ago that quote a Covad exec as saying that their average per-line LEC charge has gone from approx. US$20/month, which is the same amount Verizon charges for a standard voice line to around US$5/month.

Remember, the LEC is either handing the copper pair off directly to Covad, bypassing the POTS network, or splitting it in front of their POTS switch and running a "splice" to Covad. In neither case is $20/month justified.

Also, the LECs seem to have figured out that (a) many state PUCs are serious about not letting them sell inter-LATA services (long distance, multi-state IP backbones) until they learn to play fair with CLECs and DLECs, and (b) Tauzin-Dingell, the LECs' best, last chance at getting rid of Covad et al, won't be signed into law anytime soon. Hence, the increased cooperation.

The switch to line-sharing DSL has helped a lot as well, since a LEC truck roll isn't needed to deliver a new copper pair, and because the line also carries dialtone, there's no way it can be "mistaken" for an available pair by a telco tech.

80% isn't enough? (5, Interesting)

cperciva (102828) | more than 12 years ago | (#2705299)

They expect 40 [out of 50] of the markets to be cash positive by year end, with the entire company cash positive by mid 2003.

Either there's some interesting accounting going on, or they'r expecting to lose *lots* of money in the remaining 10 markets -- like over four times as much as the average profit from the profitable markets.

Re:80% isn't enough? (2, Informative)

arget (447057) | more than 12 years ago | (#2705396)

*ding, ding, ding* Drop that duck. You said the phrase of the day: "interesting accounting"

While the markets may be cash flow positive, the administration overhead is the big sucking sound that's draining off that cash. The company hq, the salaries, etc. In essence, everything but the colocated equipment and a techie or two.

With accounting like that, why only 40/50?

Re:80% isn't enough? (3, Insightful)

ProfDumb (67790) | more than 12 years ago | (#2705414)

They expect 40 [out of 50] of the markets to be cash positive by year end, with the entire company cash positive by mid 2003.

Either there's some interesting accounting going on, or they'r expecting to lose *lots* of money in the remaining 10 markets -- like over four times as much as the average profit from the profitable markets.

I bet you are right about the accounting. The probably have a lot of centralized costs that they don't allocate out to individual markets. These might include (re-financed) debt, marketing, management, etc. In that case all of their markets could be profitable and yet the company could be unprofitable over all.

Actually it makes sense... (2, Interesting)

sterno (16320) | more than 12 years ago | (#2705654)

If they are taking the profits from those 40 cities and investing them in infrastructure and expansion in those other 10, then it makes sense that they wouldn't be profitable overall in the short term.

Re:80% isn't enough? (2)

uslinux.net (152591) | more than 12 years ago | (#2705681)

They may be close to profitable in those markets, but not close enough. Consider as a rather simple example: In 40 of their remaining markets, they end up profitable by $1 per market. In the remaining 10 markets, they lose money by $5 per market. All told, they lose $10, and 80% of their markets are profitable, but the rest may be close. A simple example, but it makes the point. Despite being in the red, those markets will probably be profitable soon - people still want broadband, especially now that cable ISPs and other DSL companies like Northpoint at going belly-up. They've abandoned the unprofitable markets, so anything left at this point WILL be profitable, or it WILL be sold.

Why postpone your funeral when youre ready to die? (1, Interesting)

Error629 (528269) | more than 12 years ago | (#2705308)

Why postpone your funeral when youre ready to die?

If Covad really wants to make it, they need buy a vowel and change from a CLEC to ILEC. :)

sp? (1, Funny)

Transient0 (175617) | more than 12 years ago | (#2705390)

i think that techies would have learned how to spell bankruptcy by now. [grin]

well done hemos

Re:sp? (0)

Anonymous Coward | more than 12 years ago | (#2705460)

hahaha....
modded down as flamebait(i would expect everyone to recognize a joke), but then they fix the spelling.

oh, that makes me laugh.

Cash Positive by years end? (1, Offtopic)

CraigoFL (201165) | more than 12 years ago | (#2705403)

That's only 2 weeks away... of course, they could mean the end of 2002, but the article does specifically say "by the end of this year," so it would have to be a mistake on the part of the reporter.

I find it peculiar that 40 out of 50 cities are already profitable but 10 cities won't be for a year and a half (mid-2003).

Will I get my rebate check now ? (0, Troll)

coon man (471510) | more than 12 years ago | (#2705424)

Covad has stiffed me so far (4 months and counting).

Jim

Re:Will I get my rebate check now ? (0)

Anonymous Coward | more than 12 years ago | (#2706160)

Why is this a troll? It may be technically off-topic, but it certainly isn't a troll.

You guys, when you get moderator points, try to be a LITTLE bit reponsible. God help us you f'ing morons.

this post courtesy covad, may they live long and.. (4, Informative)

neilv (96511) | more than 12 years ago | (#2705444)

Well, I for one am impressed both with covad, and with speakeasy. I ordered DSL 3 weeks ago, and here it is (the service man left 10 minutes ago)! No hassles or problems, delivery on time, I'm very pleased.

My understanding of Covad's strategy, which seems good, is this: they buy only business lines from Ameritech, making them a priority customer, and getting correspondingly great response from Ameritech. But, because of the magic of bulk buying, Speakeasy ultimately is providing me with residential service and pricing. Essentially, buying a premium service at a discount, then recategorizing and re-pricing for the home market. It's working well enough that Ameritech bailed out Covad by making them responsible (pre-buying) for Ameritech's business DSL lines. I mean Verizon. OR is it SBC? Anyway, hooray for Covad.

Here's hoping they stay around!

neil

Re:this post courtesy covad, may they live long an (1)

Kidder (33176) | more than 12 years ago | (#2706576)

As an employee of ConglomCo..err SBC.. I can assure you that it's SBC :)

Monopoly playing off trusted name? (1, Insightful)

Anonymous Coward | more than 12 years ago | (#2705448)

Does it bother anyone that a big phone monopoly like SBC [techcentralstation.com] is funding Covad now though?

Poor choice of phrase (3, Redundant)

wowbagger (69688) | more than 12 years ago | (#2705450)

All of us still rooting for Covad ..


Ahh, so Covad is where all the 5|r!97 \!dd!3z are hanging out...

Poor choice of phrase...

nah... script kiddies aren't THAT smart (0)

Anonymous Coward | more than 12 years ago | (#2705485)

all they know is how to use WinNuke and PapaSmurf.c for the "1337er" kiddies

Re:Poor choice of phrase (2)

wowbagger (69688) | more than 12 years ago | (#2706083)

So sad to have to explain the joke, but some people don't seem to get it....

"rooting" is slang for "attempting to access a computer illegally and gain administration access to it".

Thus, when using the term "rooting" with respect to a network supplier, it is a poor choice of terms.

A better one would have been "pullling", since another possible meaning of that would be "pulling networking cable or fiber", which is far more apropos to a network supplier...

Bankrupcy Bankruptcy (1)

Deadplant (212273) | more than 12 years ago | (#2705453)

how come when I hit refresh the title of this article toggles between

"Covad Set To Emerge From Bankrupcy"
and
"Covad Set To Emerge From Bankruptcy"

weird... some kind of load-balancing glitch maybe?

Covad could provide relief (-1)

mupi (537084) | more than 12 years ago | (#2705454)

The potential agreements between Covadz Communications Co., which primarily provides wholesale digital subscriber line services to ISPs (Internet service providers), and the telcos could provide rectal relief for corporations clamoring for fast and affordable anal services.

The senior product manager of value-added services at Covadz, confirmed the Santa Clara, Calif., company is in talks with two infernal phone companies but declined to identify them.

But sources close to Covadz's strategy say GTE Corp. is one of the incumbents engaged in serious anal probings. The second company is believed to be Asstech Corp. or its current suitor, Anal Inc., several sources said.

The talks are expected to yield agreements under which Covadz will add its LAP expertise and technology to the phone companies' large customer bases and name recognition. The deals would expand considerably the availability of LAP, spreading the service throughout the areas covered by the regional carriers. LAP services are now mostly available only in major metropolitan areas. (LAP=Lingering Anal Probing)

Strange (5, Interesting)

yoink! (196362) | more than 12 years ago | (#2705462)

I find it really strange to hear about all these high speed service provider bankruptcies in the US. It seems like every few days or so, /. is running another story about a failed Cable or DSL provider.

What puzzles me even more is the widespread success, at least here in Montreal, Quebec, of high speed internet (both G.lite DSL and Cable.) In fact the biggest provider, Bell Canada, is going to RAISE it's dial-up rates in January, lower it's DSL rates (via a few special sign up offers) and attempt to force the remaining dial-up users over to domesticated dedicated internet connections. It must be getting to costly to keep up all those modem pools with fewer and fewer users on them.

Re:Strange (3)

iabervon (1971) | more than 12 years ago | (#2705981)

Broadband is a profitable market with a large start-up cost. If you were doing it when venture capital and loans were easy to get, you probably just went ahead and spent the money to get started everywhere, and ignored the fact that, if things continued as planned, you'd lose money for the forseeable future paying back the loans and so forth.

Then the bubble burst, and suddenly it was hard to come by the capital to pay the loans. So, while people are actually interested in your service and paying for it, you've budgetted to lose a ton of money, and you'll continue to lose the money until you reorganize with profit in mind-- ditch a lot of your longer-term infrastructure investments, get more reasonable terms on loans, and so forth. What was a reasonable business strategy before doesn't work now, and changing strategies like that can require protection from creditors.

If you're in a situation where you can put a dollar into infrastructure each day for a week and get back twenty at the end, and you can get loans based on your expected worth at the end, you'll want to put in as much money as you can. If suddenly you can't get the loans any more, you'll find that you can't finish building your infrastructure, and you can't pay off the loans you've taken, either, since the payoff you expected won't happen.

Probably your local companies chose a more conservative initial strategy, and then didn't have as much difficulty changing, or had the capital from other sources to cover it. If they didn't take on a lot of debt initially, because they started with a small deployment, they're probably fine.

Learned their lesson? (4, Insightful)

YouAreFatMan (470882) | more than 12 years ago | (#2705465)

"Covad said it has learned from the past and will not expand until it can afford it."

And it took how long and how much wasted money to realize a principle that a 8 year-old with a lemonade stand has figured out?

On the plus side for Covad, they managed to outlast their competition both on the DSL side (Northpoint, Rythms) and cable (Excite), so they've got the opportunity for a bigger share of the pie, and a better chance of staying afloat.

Re:Learned their lesson? (1)

ethereal (13958) | more than 12 years ago | (#2705700)

And it took how long and how much wasted money to realize a principle that a 8 year-old with a lemonade stand has figured out?

Well, but that's a business risk, though. If you have a chance to grab a large market share by growing quickly on credit, rather than growing slowly based on current profits, then sometimes you take the gamble that the market will be there when you grab for it.

Not that I know all the ins and outs of Covad's business to be able to say whether they executed properly or not, but Wall Street reward businesses that get big fast, and it's not surprising to see that sometimes the gambles taken to meet those goals don't succeed.

I'm glad they're still in business, because I'd be stuck with an ILEC and no servers if they weren't. Go Covad go!

Re:Learned their lesson? (1)

tkrotchko (124118) | more than 12 years ago | (#2706175)

Excite@home is a fundamentally different lesson.

Cable modems will live on because the cable companies control the last mile; the backbone is the easy part (relatively speaking).

The lesson of excite@home and DSL is similar in that neither owned the critical part of the network: the part that connects you to your customers.

Also, consider that Verizon has a monopoly and has shown *zero* interest in DSL, whereas Comcast is agressively seeking new customers.

Other notable articles (2, Informative)

ackthpt (218170) | more than 12 years ago | (#2705481)

XO agrees to takeover [nwsource.com] , Nov. 30th. This has been my ISP for 5 years and I'm probably bolting soon.

Covad getting some cash [nwsource.com] back in Nov. 14th

Covad sorting out finances [nwsource.com] Aug. 8th. $1.4 Billion debt with bondholders.

Looks like an uphill battle, but, if the economy does improve, expect the fortunes of these to follow. I'd just hate to think either would sell out and lock users into something like MSN... [slashdot.org]

CMGI (0)

Anonymous Coward | more than 12 years ago | (#2705742)

Now if CMGI gets their act together my stock portfolio might start looking OK again.

just signed onto Covad 2 days ago (1)

kb3edk (463011) | more than 12 years ago | (#2706193)

I'm a former @Home user (I didn't get dumped, I quit the service last spring after moving to a new apartment where @Home wasn't offered)... Verizon just installed a DSLAM at the CO in my suburb a few weeks ago and sent me and my neighbors a bunch of flyers in the mail offering real "cheap" DSL. Some of them signed up but because Verizon is eeeeeeevil I was kind of sitting on the whole issue until one of my coworkers suggested Covad. They still resell through companies like SpeakEasy but they can also serve as your standalone ISP now which is the route I decided to go.

I got the self-install kit and was up & running on Windows in about 45 minutes, on Linux it took me just over an hour (DrakNet plus some /etc/hacks). Sure this is crappy PPPoE with 128k upstream, but because I am only 4000' away from the CO I am always maxing out 1.5 megabits on downloads :) Such an improvement over 56k, and faster than @Home too. But of course YMMV.

Oh yeah, I had to call their tech support quick the other day and a human being actually answered the phone. How can they be bankrupt and still have live humans answering the phone? Anyway regardless of all that here's hoping these guys stay in business for a while to come.

-Adam in Philly

VC (0, Troll)

Captain Pooh (177885) | more than 12 years ago | (#2706335)

I sent an e-mail to the Venture Capital firm that had invested in Covand when they filed for chapter 11 calling them stupid

'year end' = 'end of this year' (2)

KFury (19522) | more than 12 years ago | (#2706365)

FYI while the blurb says "Years end" the article says 'end of this year.'

I'll be mighty impressed if they can make 40 of their 50 metro areas profitable in the next two weeks.

More power to Covad. (1)

Ian the Terrible (11944) | more than 12 years ago | (#2707365)

Good on them.

I've had Covad/Speakeasy.net service for over a year now.

It took two months from when I ordered until it was working, but that was the fault of GTE - they did everything they could to screw me over. But I prevailed.

I've got 608/128, 2 statics, (no PPPoE krep), a flock of POP accounts (which I never use), web space (ditto), a dialup account I can use if my DSL ever goes out, and a good Usenet feed.

And I've had *no* outages. EVER.

I pay my 60 bucks a month happily.

oh oh (0)

Anonymous Coward | more than 12 years ago | (#2708037)

did i just hit "submit"?
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