1. Use the links in the Online Companion for this chapter, your favorite search engine, and resources in your library to learn more about Covad and identify some of its current competitors. Choose two of the competitors you have identified and, in about 400 words present a comparison of their VoIP service offerings with those of Covad.
2. Use your favorite search engine and resources in your library to learn more about Covad's wireless Internet access business and its current competitors in that market. Choose two of the competitors you have identified and, in about 400 words present a comparison of their business wireless Internet access offerings with those of Covad.
In 1996, three enterprising executives decided to leave their jobs at Intel and form a company that would take advantage of an opportunity provided by the recently enacted Telecommunications Act of 1996. The law eliminated the monopoly that local telephone companies had held and allowed other companies to offer telecommunications services to businesses and individuals in what had been the local telephone companies' protected service areas. Because the goal of the company was to offer converged voice and data services, the founders named the company Covad. During its first two years, Covad became a solid regional company in the San Francisco Bay and Silicon Valley areas that sold Internet access to businesses and ISPs. Its ISP customers provided DSL access to smaller businesses and residential customers. But the Internet boom was in full swing, and in 1998, Covad hired U.S. West Senior Vice President Robert Knowling to take the company to the next level. Over the next two years, Covad raised more than $2 billion from stock and bond offerings and expanded into 98 metropolitan areas throughout the country. By the end of 1999, it had more than 200,000 customers, including AOL, MCI, and some of the fastest-growing regional ISPs in the country. It was following the lead of its main competitor, NorthPoint Communications (featured in this chapter's Learning from Failures feature), and pursuing a strategy that included rapid expansion using external funds.