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DSL.net Inc. is expanding its T-1 service with help from Covad Communications Inc. and its several hundred points of presence.

Although terms of the deal were not disclosed, DSL.net will gain access to Covad's 600 POPs nationwide. The agreement means another source of revenue for the formerly bankrupt Covad.

DSL.net is embracing T-1 as a means of providing high-speed Internet access to small and medium-sized businesses regardless of their distance from the central office. Previously, the company only offered DSL services.

"In combination with our prior T-1 announcements, we will be able to offer a more complete set of T-1 offerings, under our NETgain-T product umbrella, to an expanded set of service areas," says Keith Markley, DSL.net's president and chief operating officer. Earlier this week, DSL.net inked a similar deal with Allegiance Telecom.

Separately, Covad released its operating statistics for first quarter 2002. As of March 31, Covad's cash balance was roughly $255 million, and cash usage was under $45 million.

Covad's number of lines in service increaed two percent from Dec. 2001 to 359,000. Half of the company's total lines are business-class, and half are consumer-class. At the end of the previous quarter, business-class lines represented 52 percent of Covad's total lines.

Covad is working to grow its subscriber base through direct channel and wholesale partners. At the end of the first quarter, direct channel represented 7 percent of Covad's total lines, and wholesale accounted for 93 percent.

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