Level 3, Bell Atlantic Settle Billing Dispute

Level 3 Communications Inc. and Bell Atlantic Corp., who had been feuding over fees for sharing phone lines, Thursday reached a billing agreement.

The two companies have established new reciprocal compensation rates, reducing the rates each company pays to one another for completing calls which include calls to Internet providers. No financial details of the three-year agreement were disclosed, but the firms said they have developed a new rate structure for sharing lines in Massachusetts, New York, New Jersey, Pennsylvania, Maryland, Virginia, New Hampshire, Rhode Island and the District of Columbia.

Level 3 (LVLT) and
Bell Atlantic (BEL) also agreed to build additional trunks within the next nine months to increase their network capacity to pass calls to each other, and will increase the number of points at which their networks connect.

The arguments revolved around how to distinguish Internet calls. Bell Atlantic
argued that calls to the World Wide Web were not local calls covered by reciprocal compensation fees paid when one telephone company completes a local call originating on another company’s network. Level 3, contended that those fees do apply to Internet calls.

“Instead of continuing to argue over whether these fees apply at all, we’ve agreed to include Internet calls in the calls we pay for, but at a substantially reduced rate that more closely reflects the cost of handling this kind of traffic,” said Paul Lacouture, Bell Atlantic group president for network services. “We want to put this dispute behind us and cooperate with Level 3 and others in building the most efficient Internet connections in the country — on financial terms that benefit us both.”

“(The agreement) settles disputes regarding previous traffic,” said Daniel P. Caruso,
senior vice president, network services for Level 3. “It provides predictability for future payments. It aligns payments with our view that all interconnection payments, whether they be terminating interconnection or access charges, should be cost-based.”

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