Covad will challenge an arbitration order requiring it to pay STS...

determining that Covad “fraudulently induced” STS to sign a broadband Internet access agreement in 2005. Covad misrepresented and concealed material facts when officials told STS that Covad’s network was optimized for VoIP and being used for it, and that STS could “successfully provide VoIP services over the same network,” Judge Chris Cottle wrote in the AAA order. “These representations were false and the evidence demonstrates Covad’s sales and engineering personnel knew they were false.” The AAA’s decision was “not supported by facts or applicable law,” and a challenge will come in the “near future,” Covad’s Stevens said. Covad is looking at district courts and other avenues of appeal, he said: “STS is engaging in a defamatory campaign to force a settlement and gain an unfair competitive advantage.” Covad shouldn’t “disparage” the AAA decision, since the parties agreed on the judge, and the court based its decision on California law, said Keith Kramer, STS legal & regulatory affairs senior vice president. STS isn’t trying to defame Covad, and it doesn’t want to settle, Kramer said. STS won the award, Kramer said: “Why would I want a settlement?” STS “did everything by the book,” and it was the U.S. District Court for the Southern District of Florida that ordered the companies to the AAA proceeding, he said. The Florida court must still confirm and enforce the AAA ruling, he said, saying STS made filings to that end last Wednesday.