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Technology Stocks : (LVLT) - Level 3 Communications -- Ignore unavailable to you. Want to Upgrade?

To: wopr1 who wrote (2427)	7/20/2000 3:50:41 PM
From: SecularBull	Respond to of 3873

It's probably a trade-off that provides some needed cash to help us to become profitable in the first place. LoF

To: wopr1 who wrote (2427)	7/21/2000 8:28:07 AM
From: GHowe	Read Replies (2) \| Respond to of 3873

Service providers that sell dark fiber capacity do lose control over te fiber for the term of the agreement, in the legal sense, in that they cannot transport across it. What they allow customers to do is to gain access to their facilities and to light their own fiber. Level 3 is responsible for the "care and feeding" of only the fiber itself (i.e. fiber cuts), as well as the facilities itself. Question #2, does this sacrifice future profits? Yes, but no. Essentially, if you've followed Crowe's (and others, i.e. Nacchio, Janzen, Hindrey, etc.) thinking is that fiber optic capacity is improving so rapidly that it makes sense for a service provider to lock in long term contracts on some of the capacity. Tomorrow, Level 3 will be able to add next-generation fiber cables and optronics that will make that contractual agreement uneconomic. The ability to transport data over tomorrow's fiber and optical equipment will overwhelm what the dark fiber contract surrendered, and in the meanwhile the service provider locks in a recurring source of revenue. Not a bad deal. In other words, the service providers are placing huge bets that pricing on a per bit (stress that per bit part) basis is declining, but not nearly as rapidly as the cost of that bit. IMHO, this is perhaps this bet should work out to be one of the most lucrative investments of our lifetimes; akin to those industrialists that opened up the nation with the railroads in the 1800's. If you can recall your history lessons (which may be a stretch, depending on your age!), back then many pundits thought that the rail barons were nuts, too. If memory serves me, they didn't do too badly.