LEVEL 3 TO UNVEIL LAYAWAY PLAN

This week, Level 3 Communications will launch a new wholesale private line service that allows customers to reserve large swathes of capacity — pipes as large as OC-48s — years into the future, but only use and pay for a small portion at a time.

Level 3 is targeting carriers that want to plan for future facility needs but don't want to pay up front for capacity they don't need or face the hassle of buying and provisioning capacity incrementally, said Steve Lidell, senior vice president of private line services for Level 3.

Called (3)Hub, the service will be self-provisioning. Once a carrier customer has reserved a dedicated pipe, it can provision capacity on-demand through Level 3's online management engine, ONTAP. The carrier will be billed only for the portions it uses and ultimately retains control over a robust and highly flexible network, Lidell said.

“The way we've gone about building the Level 3 network is to make it very upgradeable, very adaptable and very resilient,” Lidell said. “This is a product that really puts the customer into the driver's seat.”

While it's obvious why a carrier customer would be interested in (3)Hub, the service has some built-in protection for Level 3. For example, customers theoretically could reserve a full OC-48 line for years even if they plan to use only a few DS-1 lines. However, the way Level 3 is structuring the service, customers pay a premium above the standard pricing of the capacity they provision as a way of offsetting the cost of dedicating so much capacity. Paying for only the capacity they use without dedicating bandwidth for the future would be cheaper, but also a far sketchier way of doing business, Lidell said, because there is no guarantee future capacity will be available or if it can be provisioned over the same fiber lines.

BT Americas will announce this week that it is Level 3's first (3)Hub customer, using the service to expand its multi-protocol label switching (MPLS) network in the U.S. and reselling the service directly to its multi-national enterprise customers. Half of the carrier's 2000 enterprise customers have multiple sites in the U.S. and are constantly shifting capacity and connectivity needs, said Chuck Pol, chief operating officer of BT Americas. They will most likely find a flexible solution that allows them to dictate their future capacity needs very attractive, he added.