VON: Level 3 gets new look

BOSTON--While its buying binge may not be over, Level 3 Communications is already looking like a different company and exploring some of its new options.

The company that purchased Wiltel, Progress Telecom, ICG, Looking Glass and Telcove all within the past year is now operating its first TDM network for voice, offering video transport for both real-time and non real-time applications, and flexing the competitive muscle that being on-net into 5500 commercial buildings nationwide can provide, according to Myrle McNeal, senior vice president of local services at Level 3.

McNeal concedes there is still integration work to do, but said in a VON interview that much of that is complete and the remainder quite clear-cut.

“We are pretty good integrators, and we’re able to do it so people don’t notice,” he said. “The Wiltel integration is largely complete and will be done by the end of the year. On the CLEC side of the house, that is growth business. Their sales and operations people remain in place, and their customers continue to deal with the same people, but their services are complemented by what we are able to offer by being Level 3.”

Being Level 3 used to mean being all IP, but with the addition of Wiltel, Level 3 has added a TDM voice network that it is putting to good use, McNeal said. As Wiltel’s largest customer--the former SBC--is transitioning off the network, Level 3 is replacing that traffic with that of customers who are looking for alternate carriers in the wake of the telco mega-mergers, he said.

“We net out from the mega-mergers in roughly the same place,” McNeal commented. “The SBC business gets replaced by other business that is available now that wouldn’t have been available before. There are a number of companies that are not interested in buying from a mega-merger. With our TDM network, we are now much more attractive suppliers to them. The same is true for our new local access networks.”

McNeal said the former Wiltel TDM network, a large, high-quality facility, still has appeal to certain businesses, such as large call centers, who haven’t been interested in making a wholesale leap to VoIP.

“These are customers who might want to try VoIP for some applications,” he said. “We allow them to use traditional services such as toll-free and LD, and at the same time, we can do the cool VoIP stuff and help them with that transition.”

Also as part of Wiltel, Level 3 acquired the Vyvx national video network, which does live video distribution for pre-production facilities across the country to support broadcast events like sports. At the same time, Level 3 is using its IP backbone to support Web 2.0 type applications such as YouTube--a new customer announced this week.

“We are squarely in the Web 2.0 space with YouTube and MySpace,” McNeal said. “We are well positioned to do both real-time Web video and non real-time video transport.”

Its CLEC acquisitions give Level 3 access to a new base of customers, including residents of the 5500 buildings now on-net, and the ability to use metro nets to reach new growing markets such as wireless backhaul and cable headend connections, he said.

This week, Level 3 also announced a Premiere Master Reseller agreement with Covad Communications, aimed at addressing VoIP adoption by small to mid-sized businesses. Level 3 will provide its underlying VoIP services to Covad for resale to SMBs, and will also provide customer leads and go-to-market support.

“The consumer VoIP market emerged a lot earlier,” McNeal said. “Business is harder to do. Number porting is harder, the applications are more complex. Small businesses don’t know where to go – there is a lot of confusion.”

By teaming with Covad, which already takes data products into the SMB space, Level 3 believes it can drive VoIP deployment in that sector, he said.