Level 3 Laying Big Pipe Under the Big Pond

Level 3 Communications, Inc. Friday
announced an agreement with Tyco Submarine Systems Ltd. to
design and develop a transatlantic terabit cable system.

The cable system is already under development and is expected to be in
service by September 2000. The undersea cable will run from Long Island,
New York to North Cornwall, UK.

The high capacity cable will be upgradeable to a total capacity of 1.28
terabits per second. According to Level 3, a 1.28 terabit cable system is
capable of transporting the contents of the U.S. Library of Congress across
the Atlantic in less than 16 seconds.

“This agreement with Tyco is a major milestone for both Level 3 and the
international telecommunications community,”‘ said Colin Williams,
president of Level 3 International.

“The Level 3 transatlantic cable will incorporate the world’s
most advanced undersea communications technology designed for high
bandwidth services. By linking the Level 3 U.S. and European networks, we
will be able to connect our customers end-to-end, over a seamless
international high capacity system,” Williams said.

Level 3 estimates that the total cost to build the first cable, including
both the undersea and land-based portions of the system, will be between
$600 million and $800 million. The company has pre-funded the purchase of
significant amounts of undersea capacity as part of its business plan, but
Level 3 may require additional funding depending on the cable’s ultimate
structure, pre-construction sales and ownership.

“Based on preliminary discussions regarding both on and off-balance sheet
financing options, we are confident of Level 3’s ability to secure
incremental funding if necessary,” said Douglas Bradbury, chief financial
officer of Level 3.

When the transatlantic cable system is completed, Level 3 will possess a
robust link to connect their North American and European networks. Williams
said Level 3 is “excited at the prospect of providing end-to-end IP based
services to our customers worldwide.”