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Level 3, AOL Expand Service Deal

America Online Inc. and Level 3 Communications Inc. Tuesday inked a new, multi-million dollar, long-term network service agreement as an extension of their original October 1999 deal.

The new agreement extends America Online's (AOL) use of Level 3's (LVLT) managed modem and network connection services.

Don Gips, Level 3 group vice president of global marketing and sales, said AOL continues to be a premiere player in the Internet services market and an important Level 3 partner.

"Level 3 has pioneered new technology for providing access, and we're happy to work with AOL to make Level 3's revolutionary softswitch-based managed modem service a significant part of AOLnet," Gips said.

Geraldine MacDonald, AOL.net vice president of operations said, the quality of Level 3's Internet services secured the contract extension with the access provider.

"Our goal at AOL has always been to provide our more than 22 million members with the best possible online experience," MacDonald said. "Level 3's innovative, high-quality managed modem infrastructure allows us to do that."

Level 3 introduced its softswitch-based managed modem service in 1998 and currently processes more than three billion minutes each month.

Softswitches are software control systems pioneered by Level 3 to provide Internet and application service providers with access to a cost-effective combination of IP network management and ubiquitous access through existing telephone networks.

Financial details and the terms of the contract extension were not announced due to a non-disclosure agreement between the two companies.

Besides the obvious revenue benefits, Level 3 contends that the deal underscores the increasing demand for its managed modem services and validates the robust capabilities of its softswitch platform.

Level 3's managed modem service was the first of its product line-up to utilize softswitches for controlling and processing calls. The platform processes more than three billion minutes of dial-up Internet access calls each month. In addition to AOL, Level 3 provides managed modem services for EarthLink Inc. (ELNK) and national free-Internet access provider NetZero Inc. (NZRO).