Investments

Lightyear Network Solutions Selects Covad for Its Bundled Voice and Data Service

Bank Of America Investment SAN JOSE, Calif.--(BUSINESS WIRE)--July 27, 2004--Covad Communications Group, Inc. (OTCBB:COVD) and Lightyear Network Solutions, LLC today announced an agreement to enable Lightyear, a national provider of telecommunications services, to bundle Covad's Digital Subscriber Line (DSL) broadband services with its local and long-distance voice services to both commercial and residential customers. Lightyear currently serves 200,000 customers nationwide.
Utilizing line splitting -- Lightyear buys the local loop from the local phone companies and bundles its local and long distance services with Covad's DSL services. Lightyear plans to make this offer available in August 2004. Lightyear will handle customer service and will provide one bill to customers including both voice and DSL services.

If you purchase Network Solutions services that are sold together as a "bundled" package (e.g., you select a Web Site package that includes both a domain name and a Network Solutions Web Site, as opposed to your purchasing such services separately), termination of any part of the services will result in termination of all Network Solutions services provided as part of the bundled package.

Investment Opportunity "Through Covad's nationwide network, two hundred thousand Lightyear customers will now have the opportunity to purchase a compelling, bundled voice and data service," said Charles Hoffman, president and chief executive officer of Covad. "With the addition of Lightyear to our growing list of partners, Covad continues to provide the critical ingredients to meet the demand for bundled telecommunication services."

In addition to the terms set forth in subsection 10(c) above, if you purchase Network Solutions services which are sold together as part of a "bundled" package of services, any termination relating to such bundle will terminate all Network Solutions services included in such bundle.

Banc Of America Investment "Covad is an integral piece of our strategy to realize the true voice and data convergence that our emerging VoIP service offering will bring to current and future Lightyear customers," says Bruce Widener, senior vice president of corporate development for Lightyear Network Solutions. "Covad's last-mile broadband footprint and breadth of services are unparalleled in the industry and will ensure competitive access for Lightyear residential and commercial customers."

Looking for voice, video and data transfer solutions

Banking Investment Covad's nationwide network is the only national DSL footprint. Covad's network enables ISPs and CLECs alike to partner with Covad for their broadband needs. A growing number of companies nationwide including AT&T, America Online, EarthLink, Sprint, Speakeasy, MegaPath and XO work with Covad to power their consumer and business broadband offerings.

M ( 2 ports) M ( 2 ports) While the pace of change in network technology continues to increase, global deregulation of telecommunications has allowed more service providers to compete for data, voice, and video network services. 2DID= (Cisco voice interface card) 2DID= (Cisco voice interface card)

Investment Solution Strategic About Lightyear Network Solutions, LLC: Lightyear Network Solutions, LLC was founded in 1993 by J. Sherman Henderson, III as a national sales and marketing organization providing telecommunication services and solutions to both commercial and residential customers. Lightyear provides a full suite of business and residential communications services including local, long distance, data, VoIP, and Internet, and offers one bill and complete customer care for services over a number of national and regional carriers, which are tailored to meet the customer's specific needs. Lightyear serves more than 200,000 customers nationwide generating annual revenue of $120M through an independent national sales force of Lightyear Agent Partners. For more information, call 1-800-805-8383 or go to www.lightyear.net.

Some cost savings are due to using a single network to carry voice and data, utilized network capacity they can use for VoIP at no additional cost.

Investment Banking Services About Covad

Bank Investment Covad is a leading nationwide provider of integrated voice and data communications. The company offers DSL, Voice Over IP, T1, Web hosting, managed security, IP and dial-up, and bundled voice and data services directly through Covad's network and through Internet Service Providers, value-added resellers, telecommunications carriers and affinity groups to small and medium-sized businesses and home users. Covad broadband services are currently available across the nation in 44 states and 235 Metropolitan Statistical Areas (MSAs) and can be purchased by more than 57 million homes and businesses, which represent over 50 percent of all US homes and businesses. Corporate headquarters is located at 110 Rio Robles San Jose, CA 95134. Telephone: 1-888-GO-COVAD. Web Site: www.covad.com.

Alternative Investment Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

Online Investment Services The foregoing contains "forward-looking statements" which are based on management's current information and beliefs as well as on a number of assumptions concerning future events made by management. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside Covad's control that could cause actual results to differ materially from such statements. These risk factors include the impact of increasing competition, pricing pressures, consolidation in the telecommunications industry, uncertainty in telecommunications regulations and changes in technologies, among other risks. For a more detailed description of the risk factors that could cause such a difference, please see Covad's 10-K, 10-Q, 8-K and other filings with the Securities and Exchange Commission. Covad disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This information is presented solely to provide additional information to further understand the results of Covad.

Accompany Essential Investment Contacts

Investment Company
Covad Communications
Kathleen Greene, 408-952-7434 (Media Contact)
kgreene@covad.com
Susan Crawford, 408-952-2130 (Investor Relations)
investorrelations@covad.com

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