[NTLUG:Discuss] DSL...timely article?

[Fred James]

I hope I am not infringing on anybody's copyrights, but I thought the
following article (quoted from this morning's InformationWeek Daily),
and its associated links, might be of interest.

GOOD MORNING! Today is Aug. 8, and this is ... InformationWeek 

** Covad Plans Bankruptcy, Stock Swap

Covad Communications Co., the nation's biggest independent 
digital-subscriber-line provider, said Tuesday that it's in 
negotiations with its bondholders to eliminate $1.4 billion worth 
of debt through a bankruptcy filing and stock swap.

Under the proposal, Covad would file in mid-August for 
reorganization under Chapter 11 of the U.S. bankruptcy code. 
Covad's operating companies, which supply service to customers, 
are not expected to be included in the proceedings, and the 
company says it should be able to operate without interruption. 
Bondholders would receive 19 cents on the dollar and shares of 
preferred stock in exchange for their high-yield and convertible 
bonds, and Covad would return $26.5 million in cash to the 
holders of its 12.5% bonds. The company says that bondholders 
representing a majority of its outstanding debt have agreed to 
the terms of the deal.

The Santa Clara, Calif., company is a former Silicon Valley 
darling that's been struggling to stay afloat this year, wracked 
by a massive debt burden, weakness in the DSL market, and tough 
competition from the Bell companies, or incumbent local exchange 
carriers. "The competition from the incumbent providers became 
more real and more serious more quickly than anyone expected," 
TeleChoice analyst Pat Hurley says. 

A number of other competitive local exchange carriers have 
already filed for bankruptcy this year: Teligent in May, Winstar 
Communications in April, and Rhythms NetConnections, just last 
Wednesday. In March, NorthPoint Communications, Covad's biggest 
DSL competitor, shut its doors and sold its assets.

But Hurley says there's hope for Covad if it can focus on 
underserved markets such as small to medium-sized businesses. "If 
they can pull off this financial restructuring and keep their 
partners and get some value-added services and really 
differentiate themselves, they're not dead yet." - David M. Ewalt

For related stories, see
Covad To Dissolve BlueStar Subsidiary
http://update.informationweek.com/cgi-bin4/flo?y=eEJX0BfOkC05Y0Qwb0Ad

Covad Gets New CEO
http://update.informationweek.com/cgi-bin4/flo?y=eEJX0BfOkC05Y0PMT0Ag

DSL's Turmoil Leaves Customers Disconnected
http://update.informationweek.com/cgi-bin4/flo?y=eEJX0BfOkC05Y0Og80Ad

-- 
...make every program a filter...