Covad

(COVD.OB)

and

WilTel Communications

struck a deal to offer fast Internet service to business customers.

The strategic relationship between San Jose, Calif.-based Covad and Tulsa, Okla.-based WilTel will provide WilTel customers with more broadband access options in big cities. Under the agreement, WilTel can now provide improved off-net access through Covad's national network, enabling it to offer small and midsize enterprises competitive business-class services, the companies said.

The pact will bring WilTel's total number of off-net access locations to more than 13,500. WilTel provides its customers with direct access to its network in more than 1,000 locations nationwide.

"WilTel now has the ability to reach millions of new business customers with the competitive advantage of IP-based access services," said Covad CEO Charles Hoffman.

"This deal, along with the recent launch of Extended On-Net, which is designed to reduce network access costs in Tier 2 and 3 regions, demonstrates WilTel's commitment to providing enterprises with more local access options," said Tony Tomae of WilTel. "More enterprises will now have access to WilTel's competitive suite of award-winning data and IP services."

WilTel is a unit of

Leucadia National

(LUK)

. Covad, a provider of digital subscriber line, or DSL, service, was once a tech favorite but has fallen on hard times and is now listed only on the over-the-counter bulletin board.

On Thursday, Covad slipped 9 cents to $2.30.