Covad Files For Bankruptcy Protection

xnuandax writes: "Well, it's finally happened, DSL provider Covad Communications has buckled under its post-tech-bubble debt load and filed for Chapter 11 (See this c|net article). While this doesn't mean that Covad is turning off the lights on its 330,000+ customers, things are not looking so rosy for the last competitive (non-Bell) DSL provider left standing. Seems that the USA is setting herself up for a broadband cartel (of Baby Bells) that's going to make OPEC look like a poster child of free market competition." The announcement is from earlier this week, but they've been acting bankrupt for a while. Just like with Loki though, this doesn't mean they're out of business, at least not yet.

Comments

Familiar tale from across the pond as well

[Rogerborg]

Just as an FYI, this mirrors the situation in the UK. The incumbent monopoly, British Telecom (or just "BT" as they now style themselves) has been stalling and foot dragging on DSL as well.

• They claimed they'd roll out DSL fast, then spent years testing to make sure they'd "get it right first time.". They then delayed further to switch to a screwed up USB (rather than ethernet) system that nobody wanted, and kicked off with massive installation delays, broken promises and network snafus. If this was them getting it right, god knows what they'd have done if they'd rushed it.
• They went with a weedy 512/256Kbit/s ADSL system with a maximum 2.5km range from the exchange, meaning only urban customers can get DSL. They're now pushing this to 3.5km (woo hoo), but still have no concrete plans to bring affordable broadband to low density suburban or rural areas, other than a prohibitively expensive satellite solution.
• When they were finally forced to open their exchanges, they claimed that there was no space. They then offered local loops in the 50 or so least profitable exchanges, while selling off exchange space in the others as luxury flats!
• Despite the market and local loop being opened, try actually getting DSL from anyone other than BT. They've made the process of taking a local loop so expensive and awkward that nobody can compete that way. They rent DSL loops wholesale at £35~=$53 a month plus a connection fee, while retailing at £40~=$60 a month, which precluding any competition from resellers. Their biggest DSL reseller customer, Freeserve, has recently had to hike their retail price from £40 to £50~=$75 just to break even. So, you can pay £40 to BT or £50 to Freeserve for exactly the same service. Tough choice, huh?

It sounds like the same sorry mess you have with the Bells. On the bright side, the UK's two main cableco's have just teamed up to market broadband cable together, so at least there's some competition, even if it's not in the DSL space.