Amended Agreement Establishes Reciprocal Compensation Rates
For Local Traffic For Next Two Years
BROOMFIELD, Colo., February 14, 2005 – Level 3 Communications, Inc. (Nasdaq:LVLT) announced today that it has executed amendments to its existing interconnection agreement with SBC, one of the nation’s largest local phone companies.
The amendments set the intercarrier compensation rate for local, ISP-bound traffic between the two companies at $.0005 per minute for the first half of 2005; $.00045 per minute for the second half of 2005; and $.0004 per minute for 2006.
“We’re pleased to have successfully executed this amended agreement with SBC,” said Kevin Dundon, senior vice president of wholesale softswitch services for Level 3. “As a result of this negotiation, we now have stable interconnection contracts with local phone companies that serve approximately 80 percent of the U.S. population. These agreements provide us with an increased degree of certainty regarding reciprocal compensation revenue for the next two years, and also serve as a framework for the exchange of Voice-over-IP traffic.”
As the company has said previously, Level 3 generally prefers negotiated interconnection agreements to arbitrated agreements given uncertainty in the regulatory environment. Level 3 believes that negotiated agreements provide the company with more predictable intercarrier relationships, including interconnection and compensation arrangements.
Level 3’s amended agreement with SBC covers SBC’s entire service territory, which includes California, Texas, Illinois and 10 other states. The amended agreement is subject to the review and approval of all 13 state public utility commissions.
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.
