Jan, 2002 : Covad Purchases InternetConnect to Offer Ongoing Service

📅 January 7, 2002 - Covad Communications (covad.com), a national broadbandservices provider, bought substantially all of the assets of InternetConnect(internetconnect.net) in an auction supervised by the US Bankruptcy Court for the Central District of California. This purchase assures all InternetConnect customers on the Covad DSL network will be offered virtually uninterrupted broadband service for their business and residential use.

The purchase price for the assets of InternetConnect, a Torrance,Calif.-based Internet Service Provider which has been in bankruptcy sinceMay 2001, was $7.35 million. Covad did not assume any liabilities orobligations of InternetConnect but will fund any shortfall in operatingrevenue during the period in which customers will be transitioned to Covad.Assets include accounts receivable, cash, equipment and other assets andapproximately 9,250 lines, which include digital subscriber line and T1broadband connections, along with virtual private network customers. Themajority of these lines are currently on Covad's network. There will be a90-day transition period for all assets to come under Covad's control.
The end users on the Internet Connect lines will be offered similar Covadservices and will experience minimal service disruption. It is expected thatcustomers will be able to maintain their email address and other servicesoffered by Internet Connect during the transition period and beyond.Communications to customers telling them about the integration process willbe sent by mid-January. Approximately 60 percent of Internet Connectcustomers are in the Los Angeles, San Diego, San Francisco, Chicago, Bostonand Washington, D.C. areas.
"Our number one priority is that these customers now have the assurance ofhigh quality service continuity from a company that is here for the longrun," said Chuck Haas, executive vice president of marketing and strategy."It is also good for Covad as we are able not only to preserve thesecustomers and get InternetConnect off our distressed ISP list, but theselines will now be higher revenue and profit for us as direct customers. Itis a win-win situation all around. Covad will continue to manage itsdistribution channels which have seen significant consolidation in 2001."