Covad and MegaPath Announce Merger

Dan Foster, MegaPath chief sales and marketing officer, earlier this month told TMC’s Paula Bernier that MegaPath would be “active” in M&A in the next six months. Obviously this wasn’t a case of overhyping the truth as in a press release, the companies jointly touted the merger of Covad and MegaPath as creating one of the largest managed service local exchange carriers (MSLEC) in the United States. It continues by explaining the combined businesses will have the largest Ethernet, DSL and T1 footprint in North America and be the only MSLEC capable of providing a full range of Internet, voice, security and VPN services nationwide.

TMCnet’s Erin Harrison believes this is some of the biggest industry news to emerge since Nortel’s assets were auctioned off. This is probably true – depending on what you think of the recent Cisco CRS-3 super-router news that some called overhyped.

Channel expert Peter Radizeski writes in his blog on TMCnet that the merger will be a win for master agents and ITSPs looking to leverage 4,400 COs.

I don’t have a strong opinion about the news – I have been in the MegaPath offices last year and I sensed a lot of energy and growth potential. Covad has been more opaque – my team has been in contact with them more than I have recently (not anyone’s fault but as always I take the blame) and as I think back to the conversations with the company over the past decade the frequent strategy changes have been fairly pronounced.

Not to say the market has stayed consistent mind you.

This merger could be good news for Covad because I get the sense MegaPath has had a much more consistent vision and strategy.

Obviously I am interested in learning more and at ITEXPO this fall in Los Angeles, TMC is partnering with Beka Publishing to launch a brand new, state-of-the-art channel show called CVx or ChannelVision Expo. The conference was obviously designed with the channel and wholesale providers in mind and I expect this newly combined company to be an important point of discussion.

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