Level 3 expands IP, data services

Level 3 Communications is broadening the reach of its IP VPN services, which will be available to enterprise customers through systems integrators and resellers later this summer.

Level 3 made the announcement at the Supercomm 2004 show in Chicago last week.

Dubbed (3) Flex, Level 3’s IP VPN service is based on Multi-protocol Label Switching, an emerging protocol that supports different classes of services for data, voice and video traffic. Level 3 says it already has several customers for the service including systems integrators that support both federal government and commercial clients.

“We’ve had an MPLS-based IP VPN since last year, and we have several strategic customers. But now we’re offering our service to the entire enterprise market through our channel partners,” says Heather Shepardson, vice president of data services for Level 3.

Unlike other ISPs, Level 3 will not sell its (3) Flex services directly to enterprise customers.

“We are empowering and enabling systems integrators and [value-added resellers] to resell (3) Flex from Level 3,” says Steve Stewart, vice president of channel programs at Level 3. “We will not be competing with our channel. Many of our competitors have a hybrid model.”

Stewart says Level 3 will announce 20 systems integrators and resellers of the (3) Flex service by the end of August. Level 3 already sells VoIP services to enterprise customers through resellers.

Level 3 also announced the availability of frame-relay services at lower rates, below DS-3 rates. Previously, Level 3 only sold high-speed frame-relay services at DS-3 and above. Level 3’s other data services include long-haul Ethernet and ATM. All of these 3 (Flex) data services will be available to enterprises through Level 3’s resellers.

Pricing for Level 3’s (3) Flex services is not yet available, but company officials say they will undercut top-tier ISPs that sell direct to enterprise customers.

“Our network and operational model are so new that the efficiency allows us to provide significant margins to resellers and still be competitive,” Shepardson says. “We don’t have the overhead of a legacy network. Our cost model is much lower.”

Indeed, Level 3 executives say their IP-based, converged network is ahead of competitors such as MCI and AT&T, which are in the process of collapsing their voice and data networks into a single IP backbone.

“We’ve been running a true converged platform, with voice, IP and data services on the same backbone, for three-and-a-half years,” Shepardson said. “For enterprise customers, having a true converged network makes operational support to the network much simpler.”

Level 3’s (3) Flex services will be available in 90 cities in the U.S. and Europe. Level 3 says it also will offer robust tools for enterprise customers to manage their networks even though the services were purchased through a reseller.

“They’ll have the ability to look at every single location a customer’s VPN and to manage and change the class of service and prioritization in the network,”Shepardson says. “We’ll be looking for [our resellers] to offer Tier 1 support.”