Covad Code of Conduct

This Code applies to directors, officers, and employees of Covad and its subsidiaries. Covad regularly distributes this Code and holds training sessions to promote compliance with the laws, rules, and regulations that affect our business.

Conflict of Interest

It is important that we each understand the importance of operating with the highest ethical standards and with utmost integrity. One area where this is particularly important is that of potential conflict of interest situations.

A "conflict of interest" may occur when a person's private interests interfere in any way, or even appear to interfere, with Covad's interests. A conflict of interest can arise when an employee, officer, or director takes an action or has an interest that may make it difficult for him or her to perform his or her work objectively and effectively. Conflicts of interest may also arise when an employee, officer, or director (or his or her family members) receives improper personal benefits as a result of the employee's, officer's, or director's position with Covad.

Although it is not possible to describe every situation where a conflict may arise, examples of situations that may create a conflict of interest include:

• Working, in any capacity, for a competitor, customer, or supplier while employed by the Company
• Accepting gifts of more than modest value or receiving personal discounts or other benefits from a competitor, customer, or supplier as a result of your position at Covad
• Competing with Covad for the purchase or sale of property, services, or other interests
• Having an interest in a transaction involving Covad and a customer or supplier (not including routine investments in publicly traded companies)
• Receiving a loan, guarantee of an obligation, or other benefits from a third party as a result of your position with Covad where there is the appearance that the third party has an expectation of direct or indirect consideration from Covad in return
• Directing business to a supplier owned or managed by, or which employs, a relative or friend

Regardless of value, no item should be accepted without first consulting your supervisor, to ensure that acceptance is in Covad's best interests and that there is no appearance of improper influence. If in doubt, you may consult with Covad's General Counsel or Senior Executive in charge of Human Resources for advice.

In order to avoid conflicts of interest, each of the senior executive officers and directors must disclose to the General Counsel any material transaction or relationship that may be expected to give rise to such a conflict, and the General Counsel shall notify the Audit Committee of such disclosure. Conflicts of interest involving the General Counsel should be reported directly to the Audit Committee.

Accuracy

Accurate business records are crucial. They are used for decision-making and strategic planning. They also are the basis for earnings statements, and reports to governments. Use good judgment and common sense when preparing any company report. We must record and report facts accurately, honestly, and objectively. This includes but is not limited to revenues, expenses, and the timing thereof.

Financial records must be accurate in all material respects. Do not make any inaccurate or misleading entries. Do not hide or fail to record any funds, assets, or transactions. All financial books and records should be consistent with generally accepted accounting principles. This Code is designed to promote full, fair, accurate, timely, and understandable disclosure in our reports and documents filed with or submitted to the Securities and Exchange Commission and our other public communications. If you learn of any material or financial inaccuracies, please report them to the appropriate financial personnel, to Covad's independent auditors, to the General Counsel, to the Chief Executive Officer, or in accordance with Covad's procedure for reporting accounting complaints and concerns.

Communication with Media and Investors

The news media and the financial community are important links to Covad's external audiences. What is said or written about Covad can impact its reputation positively or negatively. We place great importance on maintaining effective relationships with the news media and investment community. We endeavor to maintain Covad's credibility by providing accurate and timely information.

In addition, as a publicly held company, Covad is subject to certain obligations imposed by Federal and State securities laws regarding the disclosure of information to the public. Premature or otherwise unauthorized disclosure of internal information relating to Covad could violate those laws. In addition, unauthorized disclosure could cause competitive harm to Covad and in some cases result in liability for Covad and the responsible individuals.

"Inside" Information and Securities Trading

Covad prohibits the unauthorized disclosure of any material nonpublic information regarding Covad and its business partners acquired in the workplace. Covad also prohibits the misuse of such information in securities trading. All employees are required to sign an insider trading policy prior to working for Covad.

Outside Board of Directors Participation

Covad officers and employees may accept Board of Director seats on outside for-profit firms that are not in competition with Covad. Prior to accepting any position, a proposal containing the name of the firm, its relationship to Covad and the tenure of the seat should be forwarded to Covad's General Counsel and Senior Executive in charge of Human Resources for review and approval.

Compliance with the Laws

All Covad employees are expected to act in compliance with applicable laws, rules, and regulations in the performance of their duties to Covad. No employee, officer, or director of Covad shall commit an illegal or unethical act in the performance of their duties to Covad, or instruct others to do so, for any reason.

What to do if you have a concern about Business Practices?

Covad proactively promotes ethical behavior. Violations of this Code of Conduct will be dealt with through corrective and/or disciplinary action, up to and including dismissal.

Covad encourages employees to talk to supervisors, managers, or other appropriate personnel when in doubt about the best course of action in a particular situation. The Chief Executive has also designated the General Counsel as having primary authority and responsibility for the enforcement of this Code and employees should promptly report concerns about violations of any law, rules, regulations, or this Code to the General Counsel. In this role, the General Counsel shall also be subject to the supervision of the Nominating and Corporate Governance Committee, or, in the case of accounting, internal accounting controls or auditing matters, the Audit Committee of the Board of Directors. Concerns involving the General Counsel should be promptly reported to the Chief Executive Officer who in turn will apprise the Nominating and Corporate Governance Committee. To encourage employees to report such violations, Covad accepts anonymous complaints and will not allow retaliation.

The Company will devote the necessary resources to enable the General Counsel to establish procedures as may be reasonably necessary to create a culture of accountability and facilitate compliance with the Code. You are required to cooperate in internal investigations of misconduct and unethical behavior, to cooperate in investigations by government authorities and, when directed to do so by Covad, to cooperate in investigations by self-regulatory organizations.

In matters of accounting and auditing, Covad seeks to ensure that all transactions and corporate assets are properly accounted for and that all audits are thorough and complete. It is also important to Covad that it maintain the confidence of employees, stockholders, lenders, customers, vendors, and the public in the quality of Covad's accounting and public reporting. In order to help accomplish these objectives, Covad has a procedure for the reporting and delivery of complaints and concerns about accounting, internal controls, or auditing matters.

Waivers and Amendments

Any waivers of the provisions in this Code for executive officers or directors may only be granted by the Board of Directors or a committee designated by the Board and will be disclosed as required by applicable law or listing requirements. Any waivers of this Code for other employees may only be granted by the General Counsel with the explicit concurrence of the Chief Executive Officer. Amendments to this Code (other than technical, administrative, or non-substantive changes) must be approved by the Board of Directors or a committee designated by the Board and amendments of the provisions in this Code applicable to the directors and executive officers will also be disclosed as required by applicable law or listing requirements.