Level 3 Communications (NYSE:LVLT, news, filings) says it has signed a multi-year agreement with Time Warner Cable (NYSE:TWC, news), expanding its relationship with the giant cable MSO. They will be helping to expand Time Warner Cable’s network as well as to deliver additional core infrastructure services.
The deal certainly can’t hurt Level 3’s quest for sustainable higher growth rates, but of course they’ve been powering the backbone networks for most of the large cable operators for years. Details of the new arrangement were fairly sparse, however, so if anyone has additional color I’d love to hear it.
Of more general importance, however, was the announcement that two “also have agreed on terms and conditions under which they will exchange IP traffic between their respective backbone networks.” In other words they have upgraded their peering/transit relationship.
As you may recall, Level 3 has been in a long-running dispute with Comcast over the extra ports needed to support the Netflix traffic they began to carry some time back. Comcast didn’t want to pay to support the growth of a competing video service, while Level 3 felt that Comcast was unfairly using its last mile bottleneck to gain an unfair competitive advantage. Level 3 offered to carry traffic deeper in to the Comcast network to ensure a fair relationship while Comcast dug in its heels on older metrics like traffic ratios and such, and while it hasn’t been noisy the disagreement hasn’t been resolved to my knowledge.
The dispute may have been more public with Comcast, but the issue of traffic exchange between backbones, CDNs, and last mile providers was generally a bit up for grabs. Looks like Level 3 has now come to terms with a similar Cable MSO in the context of a larger relationship, which may presage other similar agreements. Again, though, details on how exactly their peering/transit relationship will change are sparse.
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If memory serves, the Cox peering transit deal has also been PR’d.
Jul 13, 2011
BROOMFIELD, Colo., July 13, 2011 /PRNewswire/ — Level 3 Communications, Inc. (NASDAQ: LVLT) today announced that it has signed multi-year agreements with Cox Communications to deliver high-speed IP and transport services, and is also expanding the capabilities made available through Level 3’s wholesale partner program that enable Cox to use and to resell Level 3’s services. Cox will also purchase additional dark fiber to expand its backbone and support the growth of its broadband network.
The comprehensive agreements into which Level 3 and Cox are entering build upon and strengthen the extensive relationships between the two companies lasting over ten years. The companies have also agreed on terms and conditions under which they will exchange IP traffic between their respective backbone networks.
“The end-user experience continues to be the core of whether business is won or lost,” said Andrew Crouch, president of Sales for Level 3. “By leveraging the investments Level 3 has made in its network and enterprise services, Cox will be better positioned to deliver a superior experience to their customers. We are pleased to have expanded our long-standing business relationship with Cox through this portfolio of agreements that are consistent with our principles.”
“To ensure the optimal quality of Cox services, we must regularly expand and enhance our network capacity, capabilities and reach,” said Jay Rolls, senior vice president of technology, Cox Communications. “The strategic relationship with Level 3 allows us to bolster our network and more effectively deliver voice, video and data products to homes and businesses.”
WSJ reporting TWC’s CEO, Glenn Britt, is stepping down. Some are going to audibly wonder if it was over a disagreement on philosophy. This would be Wall Street speak for, “Wanted to do a deal the board didn’t support.”
I have long thought that the deal he wanted to do was TWTC.