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Technology Stocks : Qwest Communications (Q) (formerly QWST) -- Ignore unavailable to you. Want to Upgrade?

To: MangoBoy who wrote (1298)	5/20/1998 1:49:00 PM
From: zj	Read Replies (2) \| Respond to of 6846

Mark, ATT already has this dial around service. I pay $4.95 a month and every call is a dime a minute, any time, any day, 7 days a week. I access their network by dialing 10-288. Maybe this is not a true dial around service, correct me if I'm wrong. Best, zj

To: MangoBoy who wrote (1298)	5/20/1998 2:01:00 PM
From: MangoBoy	Respond to of 6846

[IBD: Level 3 Buys, Sells To Craft Phone Network] James Crowe jumped on the Internet bandwagon at the right time at MFS Communications Inc. Now he's trying to hit pay dirt again by putting Level 3 Communications Inc. on the fast track. Backed with $3 billion in start-up capital from construction company Peter Kiewit Sons Inc. of Omaha, Neb., Level 3 is building a national phone network based on the Internet's data transmission scheme. It's expected to be completed in late '99. Crowe turned MFS into a major player in the phone industry by acquiring Internet pioneer UUNet Technologies Inc. Then WorldCom Inc. made Crowe a rich man by buying MFS for $14.3 billion in '96. Level 3 became a public company in April. Soon after, it sold $2 billion in junk bonds. Then, the Denver-based company acquired XCom Technologies Inc. of Cambridge, Mass., for about $165 million. Crowe recently talked with IBD about the Internet and Level 3's plans. IBD: Level 3 plans to build a 20,000-mile fiber-optic network. Some industry analysts say too many fiber networks are being built. Do you disagree? Crowe: We're dealing with a service that's price elastic in the extreme. If prices go down, demand is going to go up even faster. You can see evidence not of glut, but of shortage of key services in the U.S. and across the globe. IBD: Is there room for Level 3 as well as other players such as Qwest Communications International Inc. and IXC Communications Inc.? Crowe: We're all going to compete with the dominant former monopolies and traditional suppliers. Level 3 is the only company that has announced plans to use Internet technology only. The others are using a combination of Internet technology and old, legacy circuit switching. We're also the only carrier that wants to bundle local and long- distance service. IBD: Don't Qwest and IXC have a head start? Crowe: That's true, but we've taken some action. Two months ago, we signed an agreement with Frontier Corp. to lease a national network. IBD: Level 3 plans to offer services for making voice calls over the Internet's backbone instead of over regular phone networks. How did buying XCom fit into those plans? Crowe: We bought XCom because they had completed certain key components of a bridge (faster connection) between IP (Internet protocol) networks and the public telephone network. So customers that chose us can simply pick up the phone and dial a number like they do today. IBD: Level 3 has about $4 billion in cash available. Do you plan to emulate the acquisition strategy of WorldCom and Qwest? Crowe: I don't think you'll see us purchasing large providers of traditional phone service that use (old) circuit switches. Our view is that we're watching a historic change in technology that's akin to (the change from) mainframes to personal computers. It's got the same kind of economics associated with it. IBD: Level 3 owns an equity stake in RCN Corp., an alternative phone carrier operating on the East Coast. How does that fit into your strategy? Crowe: RCN is a good example of a company that (would buy our) unbundled network services, unbundled access to our software and automation systems. They would combine it with their own marketing and customer service expertise and sell to residential customers. We don't have any kind of deal yet with them, but it's a great fit. IBD: Phone equipment suppliers such as Lucent Technologies Inc. are squaring off with the likes of Cisco Systems Inc. to sell networking gear. Who will win? Crowe: The data communications providers (like Cisco) understand technology cycle times that are measured in months. They understand how to attract and keep the entrepreneurial talent needed to succeed today. They understand market-based standards: A corporation develops a new technology, and the standards process catches up. However, they have some major issues to deal with. One big one is the necessity to move from best-effort quality - meaning, "We do as best as we can, but you get what you get" -to the kind of quality-of-service guarantees that are essential to commercial communications systems. The traditional suppliers (such as Lucent) have almost the opposite set of pros and cons. What we're interested in is seeing the pace of technical improvement speed up and pushing the cost of communications down rapidly. This kind of competitive environment is good for that. IBD: What's Level 3's strategy for "last mile" connections to customers in local phone markets? Crowe: Fortunately, in almost every U.S. city, there are a number of high-speed choices for large businesses. We'll use a combination. The real issue is medium and small businesses and residential users, who for the foreseeable future must use copper to connect to high-speed IP networks. Those copper wires are owned by the regional Bells, and there's no incentive for the Bells to open up those copper loops. Until that problem is solved, providing high-speed IP-based services into homes still has to be done through the equivalent of a soda straw.