[Level 3 To Provide National Fiber Network To McCaw Controlled Telecommunications Company]
$700 Million Agreement Lowers Network Cost For INTERNEXT and Level 3
OMAHA, Neb., July 20 /PRNewswire/ -- Level 3 Communications, Inc. (NASDAQ:LVLT) announced today that the company and INTERNEXT, LLC, beneficially owned by NEXTLINK Communications, Inc., Nextel Communications, Inc. (subject to board approval) and Eagle River Investments, LLC -- founded by cellular industry pioneer Craig McCaw -- have signed a cost-sharing network construction agreement valued at $700 million. The agreement calls for INTERNEXT to acquire the right to use 24 fibers and certain associated facilities installed along the entire route of the Level 3 intercity fiber optic network in the U.S.
Level 3 has begun construction of a 15,000 mile coast-to-coast intercity fiber optic network. The Level 3 backbone network will consist of six to eight conduits. Initially, Level 3 will install a cable containing at least 96 fiber strands in a single conduit. The remaining conduits are available both for use by third parties and to allow Level 3 to install future generations of fiber. Construction is expected to be completed by 2001, with sections of the network becoming operational as they are completed.
"We are pleased that INTERNEXT has chosen Level 3 to provide a critical part of their national network," said James Q. Crowe, president and chief executive officer of Level 3. "The innovative agreement signed by INTERNEXT and Level 3 will significantly lower overall network construction costs for both companies. I am particularly pleased by the opportunity to work with Craig McCaw -- whom I have known and respected for many years -- and with his fine organization."
"Level 3 epitomizes the perfect partner for us. They are smart, honest and know what it takes to build networks," said Craig McCaw, chairman and chief executive officer of Eagle River Investments, LLC. "We have a common vision about networks in the future, but will each have our own ideas about what to do with the capabilities we are creating. Together, we will work to give people communications tools that can enable the information age for everyone."
The network as provided to INTERNEXT will not include the necessary electronics that allow the fiber to carry communications transmissions. INTERNEXT will be restricted from selling or leasing fiber to unaffiliated companies for the next four years. Also, under the terms of the agreement, INTERNEXT has the right to an additional conduit for its exclusive use and to share costs and capacity in certain future fiber cable installations in Level 3 conduits. |
