LEVEL 3 PATENTS SOFTSWITCH, PLANS TO LICENSE OTHERS

In an odd reversal of roles, Level 3 Communications has developed and patented its own softswitch and is now weighing the possibility of licensing the new technology out to other vendors or carriers.

The U.S. Patent and Trademark Office last week awarded Level 3 the exclusive rights to the processes used in its managed modem technology, the softswitches that run Level 3’s wholesale dial-up points of presence. Level 3 first developed the softswitch in 1997 after buying competitive carrier Xcom, which was doing similar work at the time.

Committed to building out an all-IP network and with no commonly available softswitches on the market, Level 3 bought the one company it believed was closest to developing the technology for commercial use, said Ike Elliott, Level 3’s vice president of softswitch technology.

“We had a running joke that the first person to sign a bill for a circuit switch would be signing his resignation,” Elliott said. “It was a risky decision at the time, but we developed the technology from Xcom’s prototype, and it’s been in the network ever since we filed for the patent in November of 1998.”

The patent gives Level 3 more than just protection of its intellectual property. Level 3 now owns the processes that are used in many managed modem softswitches deployed today, meaning Level 3 can collect licensing fees for softswitches used by its competitors, Elliott said.

However, the company hasn’t decided how it will pursue the patent, whether it plans to sell the softswitch itself or license the technology to another vendor, Elliott added.

Level 3 shouldn’t expect too much from its newfound intellectual property, though, according to Mark Bierberich, senior analyst for The Yankee Group. The managed modem market isn’t growing very quickly, as evidenced by Level 3’s own consolidation in the market, Bierberich said.

“It’s not to say the patent is insignificant,” Bierberich said. “I’m sure a lot of Level 3’s competitors would like to be in the same position, earning revenues off of a proprietary technology. But I don’t think Level 3 is going to build a whole new business model with it.”