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

To: GeorgiaGN who wrote (799)	4/8/1998 3:42:00 AM
From: Caxton Rhodes	Respond to of 3873

Level 3 Swoops On XCOM SS7/IP Bridge By Phil Jones 07-APR-98 It's been a busy week for Level 3, the latest venture of former MFS founder and ceo, James Crowe, which is building an end-to-end IP network to rival the state-of-the-art fiber systems of Qwest Communications. Since Friday the company has been listed on the NASDAQ exchange, signed a rights of way agreement with Union Pacific Railway, and spent $165 million acquiring a local exchange carrier with proprietary technology that facilitates bridging between IP networks and public switched telephone networks (PSTN). The rights to run cable alongside 7,800 miles of Union Pacific track will have sent alarms ringing in the head offices of Qwest, which has similar agreement with Union Pacific, and of WorldCom, the company which bought James Crowe's first company, MFS. Crowe has since said he sees both companies as future rivals, and plans to beat them by building the first national and international long-distance and local network based end-to-end on the Internet Protocol (IP). According to Crowe, pure IP networks offer a fundamental shift in the economics of communications similar to that represented by the move from mainframe computers to PCs. "They [WorldCom] are fierce competitors" he said, "but when you've got a shift in technology as fundamental as this its better to start with a blank sheet of paper," he added, referring to the cost implications of the circuit switch network legacy. The first phase of Level 3's network build strategy is likely to take "six to seven years and cost $8 billion to $10 billion" Crowe said. It will involve establishing national coverage in the US, as well as most of Europe, major cities elsewhere. However, in the meantime, the company has leased US capacity on the 13,000 mile SONET network of Frontier Corporation, with a view to starting services to major customers in several US cities in the third quarter. To terminate these services Level 3 will initially have to interconnect with the PSTN, and has decided to do so using the proprietary technology acquired through the $165 million acquisition of XCOM. The Cambridge, Massachusetts competitive local exchange carrier (CLEC), is said to be profitable, generating revenues of $3.5 million per month from a network of 10,000 local access lines. However, its attraction to Level 3 lies in its development of IP-to-PSTN "bridging" software which intercepts IP traffic inbound from the local PSTN, and switches it to the XCOM network before it reaches the tandem exchange switch. The Enterprise Digital Switch 4500 interfaces with the signalling System 7 (SS7) voice switch protocol supported by most public exchange manufacturers, and XCOM has had a strategy of licensing the software to other manufacturers. So far Ascend, the access switch manufacturer, has implemented the XCOM protocol on its MAX TNT device, but the likelihood of further licensing agreements being confirmed. "There are not others that have been announced at this time," said Mark Washburn, XCOM's vp of sales and marketing.