A Covad insider this week tells us there's a rumor circulating the halls at the CLEC that Best Buy is considering a purchase of the company. "I do know that this has been an ongoing interest and that at one time Best Buy walked away from negotiating and then came back with a new offer -- so far it looks good and is going foward," says the source.

Best Buy recently acquired DSL provider Speakeasy for $97 million, something we discussed not long ago in a conversation with Speakeasy CEO Bruce Chatterley. While the acquisition seemed strange to users, Best Buy runs the unit under their Best Buy for Business unit, allowing the companies to offer bundles of voice, data and managed services. Speakeasy had already started targeting the small business market out of survival necessity.

We contacted Covad for public comment on the possible acquisition and were told that "as a matter of course, we don't respond to rumors." Obviously, this should be filed under gossip for the moment, but if we hear more, we'll keep you posted.

Update: We've since had several insiders tell us that Best Buy is primarily (and perhaps solely) interested in acquiring Covad's VoIP operations. There's also other players in the game, including AT&T and Sprint.