Level 3 Communications
Encyclopedia
Level 3 Communications is a telecommunications and Internet service provider
headquartered in Broomfield, Colorado
.
It operates a Tier 1 network
. The company provides core transport, IP, voice, video and content delivery for most of the medium to large Internet carriers in North America and Europe. Level 3 is also the largest CLEC in the United States.
on NASDAQ
. It continued to build its telecommunications network
after going public.
In 2003, the company acquired Genuity
, and between 2005-2007 it purchased several other companies including former rivals WilTel Communications
, Broadwing Corporation, Looking Glass Networks, Progress Telecom and Telcove (formerly Adelphia Business Systems).
In 2009, Level 3 Communications made it into a "bottom rung" list of the Moodys rating agency, which contained companies with the highest debt payment failure risk.
in an all-stock transaction. On August 5, 2011, Level 3's purchase of Global Crossing
was separately approved by shareholders of both companies. 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.
. This includes the continental US and Western Europe
. It uses trans-Atlantic cables, including Yellow/AC-2, on which it owned and operated two of the four fiber pairs after the 2001 Viatel bankruptcy. Level 3 Communications has also purchased 300 Gbit/s of capacity on the Apollo cable system.
It is the current owner of AS1
, but it operationally uses AS3356, which consistently has one of the highest ranked connectivity degree
s on the Internet.
The company runs a content delivery network
which it acquired from Savvis
in 2006. Level 3 Communications delivers Netflix
video and Apple Inc music content over the Internet.
The top performing Level 3 indirect sales agencies
in 2010 include Intelisys, Microcorp, CDW/AVANT Communications, PlanetOne, Advantage Communications Group, Telarus
, and Presidio.
submitted a request to The Federal Communications Commission
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."
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. Level 3 Communications agreed to pay a new fee but maintained the view that it goes against Federal Communications Commission
regulations that prevent Internet Service Provider
s from "favoring certain types of traffic."
Another contributing factor to the dispute is the Comcast
and NBCUniversal merger. 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."
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."
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."
Internet service provider
An Internet service provider is a company that provides access to the Internet. Access ISPs directly connect customers to the Internet using copper wires, wireless or fiber-optic connections. Hosting ISPs lease server space for smaller businesses and host other people servers...
headquartered in Broomfield, Colorado
Broomfield, Colorado
The City and County of Broomfield is a prominent suburb and tier of the Denver metropolitan area in the State of Colorado of the United States. Broomfield has a consolidated city and county government which operates under Article XX, Sections 10-13 of the Constitution of the State of Colorado. The...
.
It operates a Tier 1 network
Tier 1 network
A tier 1 network is an Internet Protocol network that participates in the Internet solely via settlement-free interconnection, also known as settlement-free peering.-Definition:...
. The company provides core transport, IP, voice, video and content delivery for most of the medium to large Internet carriers in North America and Europe. Level 3 is also the largest CLEC in the United States.
History
In 1985 Peter Kiewit Sons' Inc created a subsidiary named Kiewit Diversified Group to manage the corporation's business that were non-construction related. 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 IPOInitial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
on NASDAQ
NASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
. It continued to build its telecommunications network
Telecommunications network
A telecommunications network is a collection of terminals, links and nodes which connect together to enable telecommunication between users of the terminals. Networks may use circuit switching or message switching. Each terminal in the network must have a unique address so messages or connections...
after going public.
In 2003, the company acquired Genuity
Genuity
Genuity is currently an umbrella brand from Monsanto to cover its genetically modified products. Previously, the name was used for a web hosting business owned by Bechtel, which was then sold to the ISP business under GTE in 1997 and spun off as an independent company in 2000...
, and between 2005-2007 it purchased several other companies including former rivals WilTel Communications
WilTel Communications
WilTel Communications is a telco and Tier 2 Internet Service Provider with its own MPLS-enabled OC-192 optical wave division multiplexing backbone network...
, Broadwing Corporation, Looking Glass Networks, Progress Telecom and Telcove (formerly Adelphia Business Systems).
In 2009, Level 3 Communications made it into a "bottom rung" list of the Moodys rating agency, which contained companies with the highest debt payment failure risk.
Global Crossing acquisition
On April 11, 2011, Level 3 announced a tender offer had been made to acquire fellow Tier 1 provider Global CrossingGlobal Crossing
Global Crossing Limited was a telecommunications company that provides computer networking services worldwide. It maintained a large backbone and offered transit and peering links, VPN, leased lines, audio and video conferencing, long distance telephone, managed services, dialup, colocation and...
in an all-stock transaction. On August 5, 2011, Level 3's purchase of Global Crossing
Global Crossing
Global Crossing Limited was a telecommunications company that provides computer networking services worldwide. It maintained a large backbone and offered transit and peering links, VPN, leased lines, audio and video conferencing, long distance telephone, managed services, dialup, colocation and...
was separately approved by shareholders of both companies. 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.
Network
Level 3 Communications operates a large network of the InternetInternet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
. This includes the continental US and Western Europe
Western Europe
Western Europe is a loose term for the collection of countries in the western most region of the European continents, though this definition is context-dependent and carries cultural and political connotations. One definition describes Western Europe as a geographic entity—the region lying in the...
. It uses trans-Atlantic cables, including Yellow/AC-2, on which it owned and operated two of the four fiber pairs after the 2001 Viatel bankruptcy. Level 3 Communications has also purchased 300 Gbit/s of capacity on the Apollo cable system.
It is the current owner of AS1
Autonomous system (Internet)
Within the Internet, an Autonomous System is a collection of connected Internet Protocol routing prefixes under the control of one or more network operators that presents a common, clearly defined routing policy to the Internet....
, but it operationally uses AS3356, which consistently has one of the highest ranked connectivity degree
Degree (graph theory)
In graph theory, the degree of a vertex of a graph is the number of edges incident to the vertex, with loops counted twice. The degree of a vertex v is denoted \deg. The maximum degree of a graph G, denoted by Δ, and the minimum degree of a graph, denoted by δ, are the maximum and minimum degree...
s on the Internet.
The company runs a content delivery network
Content Delivery Network
A content delivery network or content distribution network is a system of computers containing copies of data placed at various nodes of a network....
which it acquired from Savvis
SAVVIS
Savvis – A CenturyLink Company is a subsidiary of CenturyLink, a company headquartered in Monroe, Louisiana. Savvis provides information technology solutions for enterprises and government agencies...
in 2006. Level 3 Communications delivers Netflix
Netflix
Netflix, Inc., is an American provider of on-demand internet streaming media in the United States, Canada, and Latin America and flat rate DVD-by-mail in the United States. The company was established in 1997 and is headquartered in Los Gatos, California...
video and Apple Inc music content over the Internet.
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.The top performing Level 3 indirect sales agencies
Sales outsourcing
- Background :Full 'sales outsourcing' is observed where companies have an external third party sales force. It is differentiated from value added reselling or distribution in that the business model can be based on shared risk, although there are models where the outsourcer is paid for all of...
in 2010 include Intelisys, Microcorp, CDW/AVANT Communications, PlanetOne, Advantage Communications Group, Telarus
Telarus
Telarus, Inc. is a national sales agency that holds contracts with many commercial telecommunication carriers. Telarus consolidates the sales volume of hundreds of independent sales agents. As a master agent Telarus functions as the top layer in the 2-tier distribution model that is prevelent in...
, and Presidio.
Finance
In the second quarter of 2011, Level 3's shares increased by 34% and its revenue was up by 2.6% to $932 million.Disputes
On December 8, 2010 The New America FoundationNew America Foundation
The New America Foundation is a non-profit public policy institute and think tank with offices in Washington, D.C. and Sacramento, CA. It was founded in 1999 by Ted Halstead, Sherle Schwenninger, Michael Lind and Walter Russell Mead....
submitted a request to The Federal Communications Commission
Federal Communications Commission
The Federal Communications Commission is an independent agency of the United States government, created, Congressional statute , and with the majority of its commissioners appointed by the current President. The FCC works towards six goals in the areas of broadband, competition, the spectrum, the...
to investigate the ongoing dispute between Level 3 Communications and Comcast
Comcast
Comcast Corporation is the largest cable operator, home Internet service provider, and fourth largest home telephone service provider in the United States, providing cable television, broadband Internet, and telephone service to both residential and commercial customers in 39 states and the...
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."
The request for investigation stems from the decision by Comcast to alter the Peering
Peering
In computer networking, peering is a voluntary interconnection of administratively separate Internet networks for the purpose of exchanging traffic between the customers of each network. The pure definition of peering is settlement-free or "sender keeps all," meaning that neither party pays the...
agreement they had with Level 3
Level 3
Level 3 can refer to:* Level 3 Communications, Internet service provider.* L-3 Communications, communications system company.* Biosafety level, level 3.* Level 3 , Australian television show....
due to the increased volume of internet traffic due to the latter's new agreement to be a primary backbone provider of Netflix
Netflix
Netflix, Inc., is an American provider of on-demand internet streaming media in the United States, Canada, and Latin America and flat rate DVD-by-mail in the United States. The company was established in 1997 and is headquartered in Los Gatos, California...
on-line streaming content. Level 3 Communications agreed to pay a new fee but maintained the view that it goes against Federal Communications Commission
Federal Communications Commission
The Federal Communications Commission is an independent agency of the United States government, created, Congressional statute , and with the majority of its commissioners appointed by the current President. The FCC works towards six goals in the areas of broadband, competition, the spectrum, the...
regulations that prevent Internet Service Provider
Internet service provider
An Internet service provider is a company that provides access to the Internet. Access ISPs directly connect customers to the Internet using copper wires, wireless or fiber-optic connections. Hosting ISPs lease server space for smaller businesses and host other people servers...
s from "favoring certain types of traffic."
Another contributing factor to the dispute is the Comcast
Comcast
Comcast Corporation is the largest cable operator, home Internet service provider, and fourth largest home telephone service provider in the United States, providing cable television, broadband Internet, and telephone service to both residential and commercial customers in 39 states and the...
and NBCUniversal merger. On December 8, 2010 in a letter to the FCC
Federal Communications Commission
The Federal Communications Commission is an independent agency of the United States government, created, Congressional statute , and with the majority of its commissioners appointed by the current President. The FCC works towards six goals in the areas of broadband, competition, the spectrum, the...
, the New America Foundation
New America Foundation
The New America Foundation is a non-profit public policy institute and think tank with offices in Washington, D.C. and Sacramento, CA. It was founded in 1999 by Ted Halstead, Sherle Schwenninger, Michael Lind and Walter Russell Mead....
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
Comcast
Comcast Corporation is the largest cable operator, home Internet service provider, and fourth largest home telephone service provider in the United States, providing cable television, broadband Internet, and telephone service to both residential and commercial customers in 39 states and the...
’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."
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
Comcast
Comcast Corporation is the largest cable operator, home Internet service provider, and fourth largest home telephone service provider in the United States, providing cable television, broadband Internet, and telephone service to both residential and commercial customers in 39 states and the...
. 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."
On December 17, 2010, Jeff Storey, President and COO
Chief operating officer
A Chief Operating Officer or Director of Operations can be one of the highest-ranking executives in an organization and comprises part of the "C-Suite"...
of Level 3 Communications wrote a letter to Neil Smit, President of Comcast
Comcast
Comcast Corporation is the largest cable operator, home Internet service provider, and fourth largest home telephone service provider in the United States, providing cable television, broadband Internet, and telephone service to both residential and commercial customers in 39 states and the...
. In it he wrote, "Last night and today, in direct violation of our Non-disclosure agreement
Non-disclosure agreement
A non-disclosure agreement , also known as a confidentiality agreement , confidential disclosure agreement , proprietary information agreement , or secrecy agreement, is a legal contract between at least two parties that outlines confidential material, knowledge, or information that the parties...
, 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."