Level 3 loses big customer to XO

Only about half a year ago Broadwing announced to be the exclusive provider for GameRail. As you know Broadwing is now Level 3. And now XO announces to be providing GameRail with an GigE network.

 Who knows what’s going on here?

GameRail selects XO

*** What happened here? See this post

XO Communications announced that the GameRail and XO have signed agreements for XO Communications to provide network services in support of the rapid expansion of GameRail’s high-capacity gaming network. GameRail is the nation’s first and leading network operator dedicated to delivering superior performance to the online gaming community.

Under the terms of the agreement, GameRail will purchase Gigabit Ethernet (GigE) inter-city private line circuits and IP Transit services from XO Communications to support the phase one completion of the GameRail network and possible future domestic network expansions as GameRail continues to deploy services throughout North America. XO has already delivered multiple inter-city circuits, completing installation in five days due to the scalable systems and pre-deployed capacity in the XO network. With the additional new capacity provided by XO’s next generation optical network and services, GameRail will be able to further expand the availability and performance of its private nationwide network for serious online gamers.

Level 3 Completes Acquisition of Broadwing

Level 3 Communications, Inc. (Nasdaq: LVLT) today announced that it has completed its acquisition of Broadwing Corporation (Nasdaq: BWNG), a publicly held provider of optical network communication services.

Broadwing response to level 3 acquisition

Broadwing Corp. today announced that it has signed a definitive agreement to be acquired by Level 3 Communications, Inc. Under the terms of the agreement, Level 3 will pay $8.18 in cash plus 1.3411 shares of Level 3 common stock for each share of Broadwing common stock outstanding at closing.

Level 3 to Acquire Broadwing Corporation

Level 3 Communications, Inc. announced that it has signed a definitive agreement to acquire Broadwing Corporation.  Under the terms of the agreement, Level 3 will pay $8.18 of cash plus 1.3411 shares of Level 3 common stock for each share of Broadwing common stock outstanding at closing. In total, Level 3 currently expects to pay approximately $744 million of cash and issue approximately 122 million shares.

Broadwing Exclusive Provider for GameRail

Broadwing and St. Louis, Mo., Progression Networks, dba GameRail, today announced that the companies have completed definitive agreements for the implementation of a nationwide fiber-based backbone network for GameRail subscribers to access their preferred “on-net” online game hosts.GameRail’s innovative approach to improving online gaming, powered by Broadwing’s leading-edge optical backbone, will accelerate transport speeds and will dramatically improve performance for serious online gamers. GameRail will purchase several 100Mb Ethernet Private Line circuits from Broadwing over the course of a 36-month contract that allows them to add additional Ethernet-capable cities as needed.

Broadwing Q2 2006 results

Total Revenue Increases $2.0M Year-Over-Year

– Data/Broadband Revenue Increases $10.5M Year-Over-Year

– Operating Loss Narrows 63% and Net Loss Narrows 70%, Year-Over-Year

– Stephen E. Courter to Lead Broadwing as CEO

Broadwing Corporation (NASDAQ:BWNG), a leading provider of optical network communications services and solutions, today announced its second quarter 2006 financial and operational results.

For the second quarter 2006, Broadwing reported total revenue of $224.3 million, compared to $224.0 million reported for the first quarter 2006 and $222.2 million for the second quarter 2005. Net loss for the quarter was $11.7 million, or a loss of $0.13 per share. This compares to a net loss for the first quarter 2006 of $20.0 million, or $0.26 per share; and a net loss for the second quarter 2005 of $38.3 million, or $0.52 per share.

Second Quarter Selected Highlights:

– Data/broadband revenue increased 9% year-over-year with growth focused on high-speed optical and converged services.

– Cost of revenue as a percentage of total revenue improved to 62% from 66% year-over-year and to 62% from 64% quarter-over-quarter, primarily attributable to improvements in our access architecture and benefits resulting from investment in our voice network.

– Net loss for the second quarter narrowed 70% year-over-year to $11.7 million. Net loss improvement year-over-year was primarily attributable to cost reductions and decreased depreciation, amortization, restructuring and interest expenses.

“Strong year-over-year data/broadband revenue growth was driven primarily by sales of our new Converged Services and by increased demand across virtually all of our broadband product set, but particularly for high-speed optical circuits,” said Lynn Anderson, chief financial officer of Broadwing. “Recent broadband revenue growth came mostly from enterprise customers.

“The improvements in operating loss and net loss we reported this quarter are primarily the result of our successful efforts to reduce costs by improving the efficiency of our network,” said Anderson.

New Leadership

Broadwing announced July 25 that Stephen E. Courter has joined the Company as chief executive officer and director. Mr. Courter, 51, brings over 20 years of telecommunications experience to his new position, including his leadership of fiber-optic service provider Neon Communications Inc. as CEO and Chairman until its merger with Globix Corporation in 2005. Prior to Neon, Mr. Courter was CEO of Enertel, a Dutch data, IP and corporate voice services provider and the largest alternative network in The Netherlands. Mr. Courter previously held executive positions with Sprint and Sprint International, and subsequent to serving in the United States Army, held positions with IBM and KPMG. He is a graduate of Pennsylvania State University and holds an MBA from George Washington University.

“Broadwing has everything it takes to be successful in this new telecom landscape — leading-edge network, comprehensive product set, agility, and experienced people with a strong customer focus,” said Courter. “My mission is to seize the opportunity before us, leveraging Broadwing’s impressive assets to capitalize on our market position, the transition to next-generation services and the growing demand for bandwidth.”

Quarterly Financial Results Detail

Broadwing Communications services revenue can be divided into two main product categories: “data/broadband” and “voice.” Data/broadband consists of high-speed data transport services utilizing Internet protocol (“IP”) and ATM/frame relay platforms; Converged Services; long-haul transmission of data, voice and Internet traffic over dedicated circuits (Private Line); and Media transport services. Voice includes revenue from sales of long distance/local voice services, including Voice over Internet Protocol (VoIP) services.

Revenue from data/broadband services was $125.7 million, or 56% of total revenue in the second quarter. Data/broadband revenue increased 1% from the prior quarter and 9% from the second quarter 2005, with the year-over-year increase largely due to increased sales of Converged Services and sales growth across virtually all of our broadband products, particularly higher speed optical circuits. Sequential revenue growth was impacted in part by the expected disconnects of temporary “Katrina” circuits sold to carriers affected by the hurricanes last year and to continued rate compression.

Voice revenue from sales of long-distance and local voice services was $98.4 million, a 1% decrease from the prior quarter and a 7% decrease from the second quarter 2005. The year-over-year decrease in voice services revenue was due primarily to the impact of industry-wide rate compression, to lower wholesale voice volumes resulting from price increases Broadwing implemented beginning in the second half of 2005, and to a reduction in switched minutes of use from adoption of alternative technologies. Voice revenue was 44% of total revenue.

Net loss improvement from prior quarter resulted primarily from network improvements and decreased depreciation, restructuring and interest expense.

Financial Position

Big Pipe Selects Broadwing Communications for 10 Gbps Network Upgrade

AUSTIN, Texas–(BUSINESS WIRE)–July 31, 2006–Broadwing Communications, LLC, a consolidated subsidiary of Broadwing Corporation (NASDAQ: BWNG) today announced that Big Pipe Inc., a leading provider of data networking and Internet services to North American businesses, has purchased an OC-192-based U.S. network backbone service from Broadwing. The 10 Gbps of dedicated bandwidth provided by the upgrade will increase Big Pipe’s capacity on three key routes: Seattle to San Jose, Calif.; San Jose to Chicago; and Ashburn, Va., to New York.

Big Pipe, a division of Shaw Communications, one of Canada’s largest communications companies, provides IP-based backbone services to Internet service providers, carriers and large enterprises. Services include Transparent Local Area Network (TLS), Internet, private line and video transport.

“Broadwing’s unique leading-edge optical network has provided the reliability and security that Big Pipe requires to offer broadband services to our customers,” said Greg MacLean, Big Pipe’s vice president and general manager. “The upgrade of three key segments of our network to 10 Gbps underscores our commitment to our customers and is a testament to the excellent relationship we have with Broadwing.”

The multi-million dollar agreement builds on the reciprocal relationship established between the two companies in 2004. That agreement provided for Broadwing to supply network services to Big Pipe in the United States and for Big Pipe to supply Broadwing with network services throughout Canada. Broadwing owns and operates an advanced all-optical network and IP backbone, and provides data, voice, and media solutions to carriers and large enterprises.

“Big Pipe is demonstrating both its competitiveness and its commitment to customers by upgrading capacity on key routes to 10 Gbps,” said Scott Widham, president of sales and marketing for Broadwing. “They are the type of aggressive service provider who can take best advantage of our all-optical network to offer bandwidth-intensive solutions to demanding Fortune 1000 companies.”

Broadwing Appoints Stephen E. Courter New CEO and Director

Broadwing Corporation (NASDAQ: BWNG), today announced that the Company’s Board of Directors has appointed Stephen E. Courter as the Chief Executive Officer for Broadwing Corporation, a leading supplier of innovative data, voice and media solutions for both enterprises and service providers. He will also join the Corporation’s Board of Directors.

Mr. Courter brings over 20 years of telecommunications, financial and international experience to his new position. He led fiber-optic service provider Neon Communications, Inc., as CEO and Chairman until its merger with Globix Corporation in 2005. At Neon, he expanded the customer base, strengthened the balance sheet and guided the company through four consecutive years of steady revenue growth. Prior to Neon, Mr. Courter served as CEO of Enertel in Rotterdam, The Netherlands, and was also a Vice President for Sprint and Sprint International. Earlier in his career, he held positions with IBM and KPMG after serving as a Captain in the United Sates Army, a tour that included service during Operation Desert Storm. He is a graduate of Pennsylvania State University and holds an MBA from George Washington University.

“We believe Mr. Courter’s knowledge and leadership approach will enable Broadwing to build on its reputation for providing effective communications solutions. He has a proven record of success and significant experience in the telecommunications industry. He has demonstrated that he is a customer-focused team player able to grow revenue and improve operations,” said Donald R. Walker, chair of the Board’s Nominating and Governance Committee.

“I look forward to working with the entire Broadwing team to help our company to capitalize on the opportunities I see ahead of us,” said Mr. Courter.

Mr. Courter will assume his duties as CEO immediately. He succeeds Dr. David Huber, Chairman of the Board, who transitioned out of the CEO role earlier this year. Mr. Courter will be supported by the senior management team that has operated Broadwing in the interim, a team comprised of Scott Widham, President of Sales & Marketing; Lynn D. Anderson, Chief Financial Officer; and Kim Larsen, Senior Vice President, M&A/Corporate Development and General Counsel.

Infinera Optical Networking Equipment

Broadwing Corporation Selects Infinera for Next-Generation Optical Networking Equipment; Infinera Licenses Corvis Intellectual Property and Assumes Responsibility for Legacy Corvis Gear

Broadwing Corporation (NASDAQ:BWNG) today announced that it has selected Infinera’s DTN optical system to enhance its leading-edge optical network. The Infinera DTN optical platform is the first telecommunications system based on photonic integrated circuits (PICs). It combines the scalability of Dense Wave Division Multiplexing (DWDM) with the flexibility of digital switching and power of GMPLS service intelligence.

“The decision to evolve our network is significant and is a result of much research and analysis. This work leads us to the conclusion that the Infinera DTN is an important new technology in the continuing evolution of Broadwing’s industry-leading transmission network architecture,” said Mike Jones, Chief Technology Officer for Broadwing. “We believe that continuing our optical technology leadership will benefit our customers — and adding Infinera to our roster of strategic suppliers will help us to maintain that leadership.”

The Infinera DTN will enable Broadwing to deploy a robust platform to meet customers’ current and future service needs without requiring costly or operationally disruptive upgrades. Infinera’s Digital Optical Networking will enable Broadwing to offer managed wavelength services to more cities in their nationwide network while benefiting from the economics of an architecture that combines transport and flexible switching in a single platform. It also will facilitate many new service capabilities, including:

    –  Path to future 40Gb/s OC-768/STM-256 services

    –  Gigabit Ethernet Private line Service without a separate SONET
        layer

    –  Future protected wavelength services up to 50ms plus full
        bit-transparency

    –  10 Gigabit Ethernet LAN PHY

In addition, Infinera is licensing key Corvis intellectual property including Raman amplification. Infinera also will take over manufacturing and maintenance support for Broadwing’s CorWave network with members of the Corvis engineering, manufacturing, and support team becoming Infinera employees.