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Level 3, Corning Get A Little Closer

Keeping ahead of the competition is one of the key reasons for Level 3 Communication Inc.'s strategic alliance Monday with Corning Inc.

While Level 3 officials are tight-lipped when asked about particulars of the agreement, it is likely a price break is in the backbone provider's future, with Corning committed to provide 10 million kilometers of fiber optic cable. Additionally, for the next four years, Corning is the worldwide supplier of Level 3 fiber and cable.

In return, it's assumed Level 3 will collaborate on performance results and act as a "testbed" for future releases of Corning's award-winning LEAF fiber.

Wendell Weeks, Corning optical communications executive vice president, said the agreement brings the companies together for mutual benefit.

"We regard Level 3 as a premier provider of continuously improving communications services," Weeks said. "Our companies will continue to work together in the development of future fiber technologies to ensure that Level 3's customers have the benefits of next-generation fiber designs. Corning has an aggressive commitment to research and development, creating fiber and photonic technologies that continuously drive down the cost of bandwidth."

LEAF fiber supports multi-channel dense wavelength division multiplexing (DWDM) systems over a longer distance than normal. This reduces the number of amplifiers (i.e., money) needed to keep the transmission signal from degrading on a long-haul traffic line.

Kevin O'Hara, Level 3 president and chief operating officer, said this translates to bigger savings for Level 3 customers.

"I'm extremely pleased to announce this groundbreaking strategic alliance between our two companies," O'Hara said. "We view Corning as a premier manufacturer of optical fiber, cable and photonics. This agreement means our customers will receive the benefits of continuous technical innovation and receive the cost advantages new generations of fiber promise to bring.

"The price performance of network technologies is improving at a remarkable rate," O'Hara continued. "This agreement underscores Level 3's commitment to work closely with both our key technology suppliers and customers in order to stay ahead of the technology curve."

The agreement expands the relationship the two companies have shared for nearly two years now. Last month, the backbone provider was the first to sign with Corning and its latest incarnation of LEAF, buying two million kilometers of the third-generation fiber, due out early next year.

Level 3 does well to attach itself to Corning's rising star. The fiber company announced its third quarter results with earnings at $317 million, more than doubling its third quarter results of last year.

The company credits a strong demand for high-data-rate optical fiber and cable, amplifiers and its flat-panel display glass. Corning also thinks Wall Street is conservative, and predicted a nearly 70 percent earnings growth for 2001.



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