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United Online Stays With Level 3

No-frills Internet service provider United Online will continue using Level 3's network to deliver dial-up service in hundreds of U.S. cities under a contract extension announced today.

Exact terms between the Westlake Village, Calif., and Broomfield, Colo., companies were not disclosed, but Level 3 said it was a multi-year, multi-million-dollar deal. In addition to managed modem services, United Online also buys colocation services from Level 3.

For Level 3, this expanstion comes just days after it signed a new deal with United Online competitor AOL.

Spokespeople were not immediately available for comment. In a statement, a Level 3 executive said United Online was one of its fastest-growing wholesale dial-up customers.

United Online has about 2.7 million paying subscribers for its services that are sold under the NetZero, Juno and BlueLight brands.

In recent years, the company's low-priced service (around $10 per month) have gained customers from AOL and other ISPs. AOL recently responded by announcing that it has its own low-price offering in the works.

But that hasn't slowed United Online. The company reported a net gain of 173,000 paying customers during the third quarter and record revenue of $88.8 million, up 53 percent over the same period last year.