LEVEL 3 TO PROVIDE NATIONAL FIBER NETWORK TO McCAW CONTROLLED TELECOMMUNICATIONS COMPANY
$700 Million Agreement Lowers Network Cost For INTERNEXT and Level 3
OMAHA, NE, July 20, 1998 – 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.
About Level 3 Communications
Level 3 Communications, Inc. (NASDAQ: LVLT), an international communications company, operates one of the largest Internet backbones in the world, connecting 180 markets in 18 countries. The company serves a broad range of wholesale, enterprise and content customers with a comprehensive suite of services including: Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, voice and voice over IP services, content delivery and media distribution services. These services provide the building blocks to enable Level 3’s customers to meet their growing demands for advanced communications solutions. The company’s Web address is www.Level3.com.
"Level 3 Communications,” "Level 3," the red 3D brackets and the Level 3 Communications logo are registered service marks of Level 3 Communications, LLC in the United States and/or other countries. Level 3 services are provided by wholly owned subsidiaries of Level 3 Communications, Inc. Any other service, product or company names recited herein may be trademarks or service marks of their respective owners.
Forward-Looking Statement
Some of the statements that we make in this press release are forward looking in nature. These statements are based on management’s current expectations or beliefs. These forward looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside our control, which could cause actual events to differ materially from those expressed or implied by the statements. The most important factors that could prevent us from achieving our stated goals include, but are not limited to our ability to: successfully integrate acquisitions; increase the volume of traffic on our network; defend our intellectual property and proprietary rights; develop new products and services that meet customer demands and generate acceptable margins; successfully complete commercial testing of new technology and information systems to support new products and services; attract and retain qualified management and other personnel; and meet all of the terms and conditions of our debt obligations. Additional information concerning these and other important factors can be found within Level 3’s filings with the Securities and Exchange Commission. Statements in this press release should be evaluated in light of these important factors. Level 3 is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
