Level 3 Communications

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Not to be confused with L-3 Communications.
Level 3 Communications, Inc.
Public
Traded as NYSE: LVLT
Industry Telecom
Founded 1985
Headquarters Broomfield, Colorado, USA
Key people
 Jeff Storey (CEO)
Sunit Patel (CFO)
Anthony Christie (CMO)
Harold Teets (CIO)
Jack Waters (CTO)
Products Mobile telephony, Internet services, Content delivery
Number of employees
 13,500
Website www.level3.com
Primary ASN 3356
Traffic Levels 3 Tbit/s+

Level 3 Communications is an American multinational telecommunications and Internet service provider company headquartered in Broomfield, Colorado.[1]

It operates a Tier 1 network.[1] The company provides core transport, IP, voice, video, and content delivery for medium-to-large Internet carriers in North America, Latin America, Europe, and selected cities in Asia.[2] Level 3 is also the largest competitive local exchange carrier (CLEC) and the 3rd largest provider of fiber optic internet access (based on coverage area) in the United States.[3]

History

1985 to 2010

In 1985, Peter Kiewit Sons' Inc created a subsidiary named Kiewit Diversified Group to manage the corporation's business that was not related to construction. The division was spun off as a separate entity and changed its name to Level 3 Communications in 1998 to signify an increased focus on communication services. That same year saw it make an IPO on NASDAQ. It continued to build its telecommunications network after going public.[4]

In 2003, the company acquired Genuity, and, between 2005 and 2007, it purchased several other companies including former rivals WilTel Communications, Broadwing Corporation, Looking Glass Networks, Progress Telecom, and Telcove (formerly Adelphia Business Solutions).[4]

In 2004, Level 3 acquired ICG Communications' wholesale dial-up business for $35 million. Then, in 2006, Level 3 purchased the rest of ICG Communications for $163 million, taking over ICG's fiber network and nationwide Points of Presence (PoPs). It then focused on integrating those acquired companies through 2010.

2010 to present

On April 11, 2011, Level 3 announced a tender offer had been made to acquire fellow Tier 1 provider Global Crossing[5] in an all-stock transaction.[6] On August 5, 2011, Level 3's purchase of Global Crossing was separately approved by shareholders of both companies.[7] On October 4, 2011, the purchase was completed. On October 20, 2011, Level 3 Communications completed a reverse stock split and transferred its stock listing from NASDAQ to the New York Stock Exchange.[8]

On May 14, 2012, Level 3 was selected by European content provider Voxility to provide more than 250 Gbit/s to Voxility's three major datacenters in North America and Europe.[9]

On May 7, 2012, the U.S. Department of Defense's Defense Information Systems Agency (DISA) contracted Level 3 to provide dedicated fiber-cable operations and maintenance support, and IP-based infrastructure under a ten-year, indefinite-delivery/indefinite-quantity contract with a maximum value of approximately $410.8 million.[10]

On October 30, 2012, Level 3 was named as "Top Ethernet Services Provider" by Nemertes Research PilotHouse Awards.[11]

On June 16, 2014, Level 3 agreed to buy TW Telecom, a provider of business Internet connections, for about $5.68 billion.[12]

In July 2015, Level 3 acquired Black Lotus, a provider of protection services against distributed denial of service (DDoS).[13]

Operations

Network

File:BoiseSatelliteDish.jpg
Level 3 Communications satellite dish on one of its two ground stations located in Boise, Idaho

Level 3 Communications operates a large network of the Internet. This includes 46 states in the continental United States,[3][14][15] South America, Western Europe,[1][16] and select cities in Asia. It uses transatlantic cables,[17] including Yellow/AC-2, on which it owned and operated two of the four fiber pairs after the 2001 Viatel bankruptcy.[18] Level 3 Communications has also purchased 300 Gbit/s of capacity on the Apollo cable system.[19]

It is the current owner of AS1[20] (following the acquisition of Genuity, that was the BBN Technologies Spin off for their Internet Service Provider assets, including this AS), but it operationally uses AS3356, which as of 2007 consistently has one of the highest ranked connectivity degrees on the Internet.[21][22] It also operates the former Global Crossing network (AS3549) following the company acquisition in 2011.

The company runs a content delivery network which it acquired from Savvis in 2006.[23] Level 3 Communications delivers Netflix and Apple Inc. music and video content over the Internet.[24]

In 2006, Level 3 Communications partnered with Internet2, an academic network, and announced it would deploy a next generation nationwide research network.[25]

Sales organization

Level 3 distributes and sells its services through a mix of six independent sales channels: large enterprise, wholesale, federal, content and media, midmarket, and indirect. All six sales channels report to the president of sales Andrew Crouch.[26] The top performing Level 3 indirect sales agencies in 2010 include Intelisys, Microcorp, CDW/AVANT Communications, PlanetOne, Advantage Communications Group, Telarus, and Presidio.[27]

Finance

On February 5, 2014, Level 3 reported total revenue of $1.602 billion for the fourth quarter 2013, compared to $1.614 billion for the fourth quarter 2012. For the full year 2013, total revenue was $6.313 billion, compared to $6.376 billion for the full year 2012.[28] As of the release of the 4th Quarter and Full Year earnings, Internet market publication The Street was recommending a "Hold" for Level 3 stock.[29]

Disputes

On December 8, 2010, the New America Foundation submitted a request to the Federal Communications Commission (FCC) to investigate the ongoing dispute between Level 3 Communications and Comcast with regard to data trafficking agreements. The request called for an investigation of "whether and how last-mile providers might leverage their relationship with broadband consumers to act in an anticompetitive manner", and how "last-mile providers can leverage their market power to harm their competitors in the market for Internet content".[30]

The request for investigation stems from the decision by Comcast to alter the peering agreement they had with Level 3 due to the increased volume of internet traffic due to the latter's new agreement to be a primary backbone provider of Netflix on-line streaming content.[30] Level 3 Communications agreed to pay a new fee but maintained the view that it goes against FCC regulations that prevent Internet Service Providers from "favoring certain types of traffic."[31]

Comcast's acquisition of NBCUniversal was another contributing factor to the dispute. On December 8, 2010, in a letter to the FCC, the New America Foundation wrote to the FCC stating that, "Because this dispute arose shortly after Level 3 signed a deal with Netflix to transmit Netflix content, regulators should examine Comcast’s motives closely. Netflix competes directly with Comcast’s cable TV programming offerings. In fact, over the past two quarters, cable has lost an increasing number of subscribers, and a number of those consumers have substituted Netflix streaming video service for the cable service they have eliminated. It requires little imagination to view Comcast’s behavior as an attempt to raise the distribution costs for Netflix and thus force that competitor to pass these new expenses onto consumers in the form of higher prices."[30]

On December 16, 2010, Level 3 Communications CEO, James Q. Crowe, submitted a letter to the FCC regarding the ongoing dispute between his company and Comcast. In the letter he stated, "The question, quite simply, is whether Comcast and other residential broadband Internet service providers should be allowed to use their dominant control over access to their subscribers' eyes and ears in order to coerce payments from broadband backbone and independent content providers."[32]

On December 17, 2010, Jeff Storey, President and COO of Level 3 Communications wrote a letter to Neil Smit, President of Comcast. In it he wrote, "Last night and today, in direct violation of our Non-disclosure agreement, Comcast disclosed the details of our discussions to the FCC, and publicly disclosed those discussions in a blog post written by John Schanz. This breach of our agreement is exacerbated by the fact that Comcast's portrayal of our discussions is factually incorrect".[33]

In July 2013, Level 3 was accused of wiretapping large parts of data on the German Internet Exchange Point DE-CIX for the NSA,[34] and a few months later, was accused of tapping connections between Google and Yahoo data centers.[35]

References

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External links

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