The company had already suggested that it might offer such a service when Chief Financial Officer Mark Richmanat a CIBC World Markets conference in New York recently. Richman had also suggested the deal could carry some political clout and could influence the Federal Communication Commission's decision on whether or not telecommunications companies have to share their DSL lines with Covad.
In the announcement Wednesday, Covad said the service's lower price would attract more users from dial-up Internet access. Cable companies have also beento tiered services to accommodate customers who want lower prices and less bandwidth.
The announcement was made at a press conference in Washington with Rep. Edward Markey, D-Mass.; Rep. Bill Luther, D-Minn.; and Rep. Chris Cannon, R-Utah; along with Covad Chief Executive Charlie Hoffman. The congressmen touted the news as a significant help to the government's efforts to push broadband adoption. Sen. Joe Lieberman, D-Conn., has been among the more vocal proponents of an aggressive government policy on broadband, withsuch as corporate incentives.
The TeleSurfer Link service will be available throughout the company's national network, either direct from Covad or through partner Internet service providers, such as Speakeasy, a national broadband services company.
The TeleSurfer Link DSL (digital subscriber line) broadband service is directed at consumers. It costs $21.95 per month for the first four months, and $39.95 thereafter. The always-on connection has download speeds of up to 200 kbps, or about four times faster than most dial-up connections. It has upload speeds of up to 64 kbps.
This is the lowest-priced offering of its existing DSL services. Its $49.95 a month plan provides download speeds of 608 kbps and upload speeds of 128 kbps; its $59.95 a month service offers download speeds of 1.5 mbps and upload speeds of 128 kbps; and the $89 a month package, aimed at businesses, offers download speeds of 1.5 mbps and upload speeds of 384 kbps.
The company said TeleSurfer Link includes an installation kit with a DSL modem, which is free after rebate. The service will be refunded if the customer is not satisfied within 30 days.
When Covad Chief Financial Officer Mark Richman talked about the company's plans for a tiered service at the CIBC conference recently, he said that the move could influence federal regulators' pending decision on line sharing. The logic for sharing is to encourage more competitive practices that will benefit consumers--something Covad says its low-priced services will do.
Hoffman emphasized the regulatory importance of the new services Wednesday.
"This will be a great product that we expect to be profitable for both Covad and its ISPs due to low-cost line-shared technology," Hoffman said in a statement.
If the FCC reverses its mandate that phone companies like Verizon Communications and BellSouth share their DSL lines with Covad, Covad's business model would be, analysts have said.