RealTime IT News

Qwest, CAIS Spend $69 Million on Broadband Access

Infrastructure firm Qwest Communications International Inc. and high-speed Internet service provider CAIS Internet Thursday formed strategic alliance worth approximately $69 million to deliver high-speed Internet access to new markets.

Under terms of the deal, CAIS (CAIS) signed Qwest (QWST) to a $54 million contract for high-speed Internet capacity and broadband Internet communications services. CAIS will purchase $44 million of capacity on Qwest's fiber network adding 35 Qwest points of presence to CAIS' network. In return, Qwest will invest $15 million in CAIS Internet to accelerate the company's network and high-speed multi-user technology. Qwest's investment is equivalent to a 4.2 percent ownership stake in CAIS.

CAIS has also committed to purchase $10 million of Qwest's communications services, which may include application hosting, e-commerce and Web hosting.

Thursday's deal expands on an agreement signed last year in which Qwest will provide CAIS with leased and routed IP bandwidth on the domestic Qwest Macro Capacity Fiber Network. That agreement is set to last 10 years and cost $100 million.

The new alliance gives CAIS more areas in which to expand, said Gregory M. Casey, Qwest's senior vice president of wholesale markets.

"For Qwest, the CAIS target markets represent a new opportunity to deliver broadband access to hotels and apartment buildings," Casey said.

"In advancing our network, (the deal) allows CAIS to continue offering our innovative high speed Internet services and meet the needs of our growing contracts," said Ulysses G. Auger II, CAIS Internet chief executive officer. "In addition, the joint efforts will help position CAIS as a leader in delivering broadband access to multiple points in new and emerging markets."