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McLeodUSA To Roll Out Next-Generation Network

Competitive local exchange carrier McLeodUSA is making an investment in the future with its Wednesday's announcement to deploy a 31,000-mile, next-generation fiber optics network throughout the U.S.

The two-year plan calls for the installation of a mesh-switching platform on the proposed 25-state backbone, considered the successor to the SONET-style ring architecture used by most of the carriers today.

Roy Wilkens, McLeodUSA data network group president, was enticed out of retirement early this year to round up a team of experts to get the new network deployed. Following months of preparation, he said the company will announce the vendors supplying the mesh switching equipment at the end of November.

Wilkens said the time has come for technology to work for the customer, not the other way around.

"Today's sophisticated customers are tired of waiting for providers who are so preoccupied with exotic technologies that they've forgotten the basics of customer service," Wilkens said. "In a market so easily distracted by hyperbole, customers are the first to understand that providers with exceptional focus on the fundamentals of their business needs are the true innovators.

Parts of the upcoming fiber optic network have been in place for years, and will be incorporated into the whole. That, and the network it will acquire from its forthcoming acquisition of Caprock Communications, account for about 16,000 route miles of fiber. Level 3 Communications has been tapped to provide the other 15,000 miles, and should complete its installation by the end of the first quarter of 2001.

Wilkens explained the benefits of a mesh-switching network over its ring-based counterpart, called synchronous optical network. Using a mesh switch, he said, would reduce the 307 SONET rings in Chicago, for example, down to 15.

"It makes packetizing data much cleaner, much simpler than with SONET," Wilkens said. "Where a SONET switch needs a ring to reroute a data packet, the mesh switch learns where the other switches are and reroutes the closest one."

The goal, he continued, is getting bandwidth to the customer. He said McLeodUSA will focus its attention selling its bandwidth and services wholesale to large businesses. There is a movement, Wilkens said, away from the Internet service provider and to the large business. They are building their own teams and deploying a bandwidth solution on their own now, where before they relied on an ISP to set everything up.

Steve Gray, McLeodUSA president and chief operating officer, said that strategy works well with its existing base of customers.

"In terms of our core business, our fundamentals have never been stronger," Gray said. "This includes lines sold, net lines installed and our continued ability to implement the systems to support our customers, resulting in one of the lowest customer churn rates in the industry. We have a funded business plan and one of the most experienced management teams in the industry. We know what to focus on -- and that is developing advanced but functional products to meet the real needs of our customers."

Funding for the project comes from a $1 billion loan secured earlier this year, underwritten by Chase Manhattan Bank, Citibank, Bank of America and Goldman Sachs.



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