Todd Truitt, ideaadvisor.com senior telecommunications equity analyst, said Covad has booked $58 million in DSL sales last quarter, but only collected on $32 million of that amount. Because local and regional ISPs can't pay for the services they've booked, it's hurting the company that's providing the lines. It's a trend, he said, that's affected all DLECs, not just Covad.

"If these ISPs can't raise money to continue operating, then obviously there is no money to pay the DLECs," Truitt said. "We have the opinion that the current condition of the capital markets will continue to hurt stocks with capital intense business models, on more than one level. Not only does (the DLEC) have to worry about raising money itself to continue operating, but it has to worry about its customers having the capital to pay it for its services as well.

a long time ago, in a galaxy far far away...