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Level 3 seeks OK for local service
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Ian Olgeirson Business Journal Staff Reporter
Level 3 Communications Inc. has filed for permission to provide local telephone service in the metro area.
The fleet upstart with lofty aspirations to build a national fiber-optic network filed an application with the Colorado Public Utilities Commission to begin selling local dial-tone services.
The offshoot of Peter Kewit Sons' in Omaha, Neb., plans to initially resell service from U S West Communications, targeting business customers in what is becoming a crowded market for alternative service providers.
A Level 3 spokesman said the company, which doesn't plan to begin offering service until the fourth quarter at the earliest, will only resell service until it either builds or acquires its own network in Denver.
Documents filed with the commission report that Level 3 plans to stick close to the urban areas in its quest to build a customer base for local, long distance and data services.
Level 3 is building a new headquarters in Broomfield, which should be done by mid summer next year. The company, using newly listed stock on the Nasdaq exchange, recently announced intentions to buy XCOM Technologies of Massachusetts.
XCOM offers local phone service and has developed technology to bridge emerging Internet protocol networks with traditional phone networks.
Separately, Qwest Communications International Inc. remains mum about its plans to provide local dial-tone service, but it's buying into the business in a big way.
The company declined to illuminate its local strategy, saying that it's currently focused on long distance and data services.
Its proposed acquisition of LCI International Inc., however, sheds some light on which markets it will likely inherit.
LCI, a McLean, Va.,-based long distance provider has aggressively tackled local phone service, currently reselling service to businesses in 39 markets across the country.
The acquisition, a $4.4 billion transaction paid for with Qwest stock, has yet to be finalized, giving both companies pause to discuss the future.
LCI, however, has made an aggressive push in the Midwest and on the East Coast. It also provides service in five cities in Texas and six markets on the West Coast from Orange County to Seattle.
Anne Bingaman, former chief of the antitrust division in the U.S. Department of Justice, heads the unit and has launched several salvos aimed at loosening the Baby Bells' grip on their markets.
In January, LCI filed a petition with the Federal Communications Commission proposing that Baby Bells such as U S West separate into retail and wholesale divisions. The retail unit would continue to serve individual customers while the wholesale division would concentrate on resale to phone companies that lack local facilities.
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