TelePacific Communications to Acquire Fixed Wireless Internet Service Provider Covad Wireless

Dec 22, 2010, 09:00 ET from TelePacific Communications

LOS ANGELES, Dec. 22, 2010 /PRNewswire/ -- TelePacific Communications, the largest California-based CLEC providing integrated voice and data telecommunications services to the small and medium-sized business ("SMB") customer segment in California and Nevada, and MegaPath, Inc., the leading provider of managed IP data, voice, and security services in North America, today announced a definitive agreement for TelePacific Communications to acquire MegaPath's NextWeb, Inc. subsidiary, dba Covad Wireless, a broadband fixed wireless carrier operating in California and Nevada.

Under the terms of the agreement, TelePacific Communications will gain approximately 3,500 profitable broadband fixed wireless business customers in California, Nevada and suburban Chicago through an all cash purchase of capital stock.

TelePacific's acquisition of Covad Wireless will expand TelePacific's SMB services into the fixed wireless market with a complementary network footprint. Transaction benefits include increased availability of high bandwidth products to customers, the ability to provision customers more quickly, and own the "last mile" which reduces dependency on incumbent local exchange carriers (ILECs). The transaction also strengthens TelePacific's position as the number one competitor to AT&T and Verizon for SMB customers in the California and Nevada markets.

"Covad Wireless is an established innovator in fixed wireless broadband delivery with demonstrated managerial and operational excellence," said Dick Jalkut, president and CEO of TelePacific. "Benefits to new and existing customers will be twofold—expanded fixed wireless service offerings and the expertise of the entire Covad Wireless team."

Covad Wireless customers will gain access to TelePacific's enhanced business services including converged voice and data networks in California and Nevada, and wide area networking capabilities globally. The addition of a broadband fixed wireless network allows TelePacific to offer quick-to-deploy wireless Internet, and reinforce its business continuity solutions with both wireless and wired network paths.

"Following our merger with Covad and Speakeasy, MegaPath is continuing to refine our business with a focus on providing nationwide access, security and voice services," said D. Craig Young, Chairman and CEO of MegaPath. "As a regional offering, Covad Wireless fell outside of our strategic focus, and this agreement ensures that those customers are properly supported."

The transaction is subject to customary closing conditions, including federal regulatory approvals. TelePacific will assume operations responsibility for the Covad Wireless customer base following regulatory approval and closing, expected in the first or second quarter of 2011. Throughout the closing process, there will be no impact to Covad Wireless customer service or support. TelePacific and Covad Wireless will work together to ensure a seamless transition of customer service.

The exclusive financial and legal advisors to TelePacific were Brown Brothers Harriman & Co. and Gibson, Dunn & Crutcher LLP, respectively. The exclusive legal advisor to MegaPath was Bingham McCutchen LLP.

About TelePacific Communications

TelePacific Communications is a competitive carrier that serves customers throughout California and Nevada. Headquartered in Los Angeles, the Company is the leading competitive carrier in its footprint, with customer care centers in Los Angeles and Stockton in California and Las Vegas in Nevada. In business since 1998, TelePacific provides services through a combination of TelePacific-owned switches and network infrastructure, including its own and leased robust fiber-optic network assets. Offering local and long distance voice, dedicated Internet access, private networking and data transport services as well as bundled voice and Internet solutions and wholesale services, TelePacific manages more than 38,000 customer accounts with more than 1.1 million access lines in service. For more information, visit

About MegaPath, Inc.

MegaPath operates one of the largest end-to-end communications networks in the country. In 2010, the company combined with Speakeasy and Covad to form a single company providing a full range of nationwide IP voice, security, and VPN and Internet services. MegaPath helps more than 85,000 businesses of all sizes to easily and securely communicate between their headquarters, employees and business partners to lower costs, increase security and enhance employee productivity. To learn more about MegaPath's managed IP data, voice and security services, please visit or call 1-877-MegaPath (634-2728).

SOURCE TelePacific Communications