Covad sells high-speed Internet access through DSL (digital subscriber line) connections to ISPs such as DSLnetworks, which then sells those connections to businesses and individual consumers.
Covad terminated its business relationship with DSLnetworks last week by shutting down the DSL lines that it provided the company, which left many of DSLnetworks' customers without Net access. DSLnetworks alleges that Covad then contacted the shutdown customers and urged them to switch service to Covad.
DSLnetworks filed an action Wednesday to stop Covad in Santa Clara County Superior Court in California.
DSLnetworks' spokesman Dan Melmed alleges Covad is violating an agreement the two companies signed last December.
"Neither company was to use the other company's customer information other than for normal business procedures like installation and maintenance," he said.
Covad spokesperson Martha Sessums said the company could not comment on the DSLnetwork's legal action, but did say that shutting down its connections was within the boundaries of previous agreements.
Sessums also says DSLnetworks owes Covad several millions of dollars and has not met its financial obligations. "When DSL got in arrears in the year 2000, they never met previously agreed upon payment plans," she said.
DSLnetwork's Melmed said the company hopes for a ruling Thursday.