Just as Covad's massive expansion reached a crescendo, the free-spending venture capitalists and institutions funding independent ISPs turned off the spigot. This caustic blend of economic realities resulted in many of Covad's customers filing for bankruptcy protection, delaying payments, or simply not paying their bills at all. For a company burning through an average of $3.3 million a day, the loss of any cash was painful. Covad recently reported a 40 percent increase in nonpaying ISP customers. The company also reported a loss of $1.44 billion in fiscal 2000, or roughly a loss of $4,500 per installed line.

A lot of people may not realize this, but Speakeasy DSL contracts their lines through Covad primarily. This would spell trouble or at least a pain in the ass for those guys too.