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In the CEO Spotlight section in Internet Telephony magazine, we recognize the outstanding work performed by exemplary companies. Each month we bring you the opinions of the heads of companies leading the Internet telephony industry now and helping to shape the future of the industry. This month, we spoke with Charles E. Hoffman, President and Chief Executive Officer at Covad.


GG: What is Covads mission?

CH: We aim to be the most innovative provider of broadband communications with our unparalleled assets: a nationwide network, superior customer experience, efficient operating support systems, and services that enhance the way people live and work.

GG: What is your vision for Covad and how is the company positioned in the next-generation telecom market?

CH: With Americas largest nationwide DSL broadband footprint, Covad is uniquely able to provide broadband services to consumers and small-and medium-size businesses, either directly or through our array of wholesale partners like AOL and EarthLink. Covad offers an extensive portfolio of Internet access services for businesses, including data-only T1 services, four business-class symmetrical DSL (SDSL) services and dedicated-loop services.

Since becoming the first company to offer DSL in the U.S., Covad has continued to innovate, introducing new and better communications services to the market. We are a market leader with Covad VoIP, a business-class broadband service that truly integrates telephone service and high-speed Internet access. Covad also offers Voice-Optimized Access (VOA) that allows us and partners to provide VoIP service on a fully managed line to ensuring call quality. And later this year, in partnership with EarthLink, Covad will offer Line-Powered Voice Access utilizing next-generation ADSL2+ services that will allow Covad to offer multi-megabit broadband, voice and ultimately video services.

GG: Now that it appears that growth and opportunity are the trends in the VoIP industry, what possible hurdles do you see that might upset this momentum?

CH: Education is the main obstacle. With so many different VoIP packages on the market, it is difficult for customers to identify the service that fits their specific user habits. Once the lines between true business-class and residential VoIP are further clarified to the customer, the industry will see an increase in adoption and less disappointment by those who misunderstand the technology.

Quality and reliability, of course, are key. We have made and will continue to make the necessary investments to ensure an excellent customer experience.

GG: What are some of the technology areas where Covad is increasingly focusing, and why are these areas important to the future of your company?

CH: Wireless last mile business broadband service and line-power voice access (LPVA) are two disruptive technologies in which we are among the market leaders. Our fixed wireless broadband technical trials have demonstrated the feasibility of using this technology to further expand our existing network reach and offer new services, like VoIP over WiMAX.

Covad LPVA is a new hybrid phone service that combines the simplicity and stability of the traditional wired telephone with the flexibility and pricing of VoIP. LPVA is a true ILEC-replacement residential voice service; it is created with the ability to work on your existing inside telephone wiring and stays operational in the event of a power outage. We have a commercial launch of this service scheduled in the fourth quarter of this year with EarthLink.

GG: How will the acquisition of NextWeb affect Covad's future?

CH: Our acquisition of NextWeb accelerates Covads entry into the wireless broadband market by up to two years versus building it out ourselves, and will provide the cornerstone of our wireless efforts. This is one of our key strategic imperatives, and is another step in taking control of our destiny. The NextWeb team has a proven track record of profitable growth, and we expect the economics of this business to improve with Covads extensive network assets and expertise and distribution channels. With wireless last-mile connectivity, Covad will be able to reduce its direct recurring costs per customer for an equivalent wireline T1 by up to 60 percent, deliver an improved customer experience as a result of being able to control the service end-to-end, reduce dependence on copper and the regulatory landscape, and add high-bandwidth services targeted at the small- and medium-sized business market.

GG: Describe your view of the future of the IP telephony industry.

CH: IP telephony is the future its only really now beginning. We have seen significant growth throughout 2005 and anticipate that trend to continue. In only a few short years, were going to be seeing a vast array of new IP applications, ranging from video, to VoIP over fixed wireless, and other applications people are just now cooking up. Businesses especially will benefit from these technological advancements, making corporations even more efficient and productive than today. IT

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