Covad Communications Co

Financial reality caught up with Robert E. Knowling Jr. on Wednesday, forcing him to resign as chief executive of high-speed Internet service provider Covad Communications Group two weeks after the company reported widening losses. With Covad's stock trading more than 90% below its 52-week high, the company's board of directors decided that new leadership was in Covad's "best interest," according to a company statement. Knowling, 45, also served as president and chairman of the board.

Verizon Communications Inc. and Covad Communications Group Inc. settled a six-year antitrust fight. Verizon and Covad ended billing and antitrust lawsuits and expanded their working agreements, the companies said. Terms weren't disclosed. The settlement ends all litigation between the companies, a Verizon spokesman said. It also led to new agreements between Covad, Verizon and MCI Inc., which Verizon is buying.

DSLnetworks, an Internet service provider whose customers lost high-speed access last week when Covad Communications Inc. cut the connection, fired back by suing Covad. In its suit, San Francisco-based DSLnetworks contends that Covad has been contacting its 3,500 affected customers and asking them to sign up for DSL service directly with Covad. Covad sells high-speed digital subscriber lines to Internet service providers, which in turn sell them to businesses and residential users.

Covad Communications Group Inc. said Wednesday that it would launch a new telephone service that would allow its partners to compete more effectively with regional phone giants for both voice and high-speed Internet access. Covad, the nation's largest independent DSL provider, said it would test its line-powered voice offering within a month and would roll out the service by midyear. The service would allow Covad's partners -- especially AT&T Corp., MCI Inc., EarthLink Inc.

Covad Communications Chief Executive Robert E. Knowling Jr. strides into an austere conference room, ignoring the usual introductory pleasantries as he settles into a leather chair, Diet Coke in hand. "We've got way too many spare cubicles," Knowling says of the smaller of the two high-speed Internet company's Santa Clara, Calif., offices that he's just decided to close. "I go all around the country and I never hear people complaining, 'Bob, we ain't got enough space.'

Bucking a trend in the high-speed Internet business, Covad Communications Group Inc. said it plans to emerge from bankruptcy proceedings Thursday. A U.S. Bankruptcy Court in Delaware approved Covad's reorganization plan, which erases $1.4 billion of high-yield and convertible bondholder debt. Covad, like other broadband providers, ran into trouble last year as sources of capital dried up while the companies were in the midst of rapidly expanding their networks.

Covad Communications Group, a struggling provider of high-speed Internet access, said it plans a prepackaged bankruptcy filing this month to wipe out $1.4 billion in debt in an attempt to save the business. Though some analysts say this might help Covad survive, others note that Covad is yet another large telecommunications company struggling to compete against the near-monopoly of Pacific Bell, Verizon Communications and other local phone companies. Santa Clara, Calif.

Covad Communications Group Inc., an Internet service provider, agreed to buy about 24,500 customers from troubled Flashcom Inc. in Huntington Beach for as much as $3.5 million in cash and a waiver of debts owed. Covad will exchange $750,000 in cash and debt forgiveness upfront and as much as $2.75 million more in cash depending on how many Internet users agree to be transferred, Covad said in a press release. The offer was approved by a U.S.

Pacific Bell's new high-speed Internet service will probably be available in Los Angeles and surrounding areas in July or August, but business customers won't have to wait that long. Beginning today, NorthPoint Communications Inc. of Irvine will make similar high-speed network access available in the San Fernando Valley and in Los Angeles, Orange and San Bernardino counties through five Internet service providers.

Flashcom Inc., the troubled Huntington Beach provider of high-speed Internet access, has filed for bankruptcy protection and laid off more than 40% of its work force. In its Chapter 11 petition to reorganize its debts, Flashcom listed $94 million in assets and $55 million in debts as of Oct. 31. The layoffs--the third round in recent months--left Flashcom with about 250 employees and a skeletal operation, down from more than 500 workers in early November.