CenturyTel buys Midwest backbone from Level 3

CenturyTel is getting into the habit of picking up distressed fiber assets. The Monroe, La.,-based carrier today purchased from Level 3 a former Genuity regional backbone connecting rural markets in Missouri, Arkansas and Illinois for $17 million in cash. Earlier this year, the company acquired Digital Teleport Inc., a fiber carrier serving the plains states that was going through Chapter 11.

Called the Midwest Fiber Optic Network (MFON), the 1500-miles of new fiber have changed hands on numerous occasions. Built independently, GTE acquired the network and later handed them over the Genuity before the merger with Bell Atlantic. Level 3 inherited the network when it purchased bankrupt Genuity’s network assets.

Level 3 officials said the network generated about $1.5 million in revenue per month, but the out-dated network didn’t fit into Level 3’s all IP network architecture. Nor did fit with part of Genuity’s old core network, making it difficult to integrate along with other Genuity assets. As CenturyTel was by far MFON’s largest volume customer, the company decided it was best to sell the assets outright to the rural carrier instead of migrating the customers over to its core network.

CenturyTel was more than happy to oblige as the acquisition fit in perfectly with its “clustering” strategy for entering new markets, carrier officials said. The MFON markets compliment the DTI assets perfectly filling in holes in its new Midwest footprint, a spokeswoman for CenturyTel said.

“We have mostly grown through acquisitions,” the spokeswoman said. “Rather than looking for little isolated markets though we try to expand adjacent to where we already own assets. … This transaction not only furthers that cluster strategy, it’s a network that is already carrying our own traffic.”

CenturyTel’s customers will notice no difference after the deal closes--which is expected in the fourth quarter--and Level 3’s other customers on the backbone will likely notice little change. CenturyTel said their contracts are locked in and the carrier will continue running MFON as Level 3 has.