Level 3 Communications

Description | Analysis | Role as CDN Provider | Net Neutrality | Privacy and Surveillance Issues


Level 3 Communications, Inc.Level 3
Regional HQ
56 Marietta St NW
Atlanta, GA 30303
www.level3.com
local.level3.com/en/Georgia/


Description
Originally founded in 1985 as Kiewit Diversified Group, Inc. and owned by Peter Kiewit Sons’, Inc.—a construction, mining, information and communication provider incorporated in 1941—Level 3 Communications, Inc. adopted headquarters in Broomfield, CO and shifted its focus to communication services and infrastructure in 1998. Today, Level 3 provides integrated communication services globally through its North American regional facilities and international subsidiaries throughout Latin America, Europe, Africa and Asia. Level 3 Communications offers a wide range of information and communication services geared toward meeting the needs of businesses, including access to virtual private networks (VPNs), Internet services, rural access solutions, voice over internet protocol (VoIP), digital video and media delivery services, security consulting services, managed ethernet and fiber access, data center and cloud services, and content delivery network (CDN) access. In order to provide services reliably on a global scale, the company has purchased or installed more than 35,000 miles of undersea fiber optic cable[1] and operates numerous company-owned, dedicated data centers including two in downtown Atlanta, GA that had employed hundreds of people. Level 3 will soon also operate a network in Alpharetta, GA, a city in the Atlanta metropolitan region, expanding the company’s footprint to 265 metro route miles in the greater Atlanta area. The publicly traded company (LVLT) employs over 10,000 people globally and has experienced steady growth in its stock price over the past three years. However, company value has proven vulnerable to net neutrality policy, as when in February 2014 shares fell after the FCC struck down net neutrality rules. Stock value has since exhibited strong upward momentum after Netflix Inc., which is a large and highly visible client of Level 3, struck a “paid peeringdeal with Comcast Corporation.

One of Level 3 Communications’ most vital and far reaching services is its vast Tier 1 content delivery network (CDN) that connects networks and content providers across the United States and the world. Level 3 Communication’s networks act as the backbone between content of media providers such as Netflix, Inc. and internet service providers such as Comcast Corporation by acting as an information middleman. CDNs transfer data between the two in order to ensure coverage, bandwidth, and lower infrastructure costs. This dynamic has put the company in direct competition with other major CDN providers, such as Akamai Technologies and Limelight Networks, and created conflict with Internet services providers, including Comcast Corporation. The company has also come under fire recently, as The New York Times published accusations that Level 3 cooperates with the National Security Agency to spy on Google, Inc. and Yahoo!, Inc. users. The Times has alleged Level 3 secretly allowed the federal agency to access the company’s fiber optic cables and siphon data from private networks. The Level 3 network has become critical to greater Atlanta, GA operations and information infrastructure, provides network access throughout the city and its surrounding area, and connects the transfer of information throughout the region and the globe. Level 3’s fiber optic cables encompass Atlanta, GA and potentially transmit data to and from all of its residents and visitors. Along with its downtown data centers, these cables ensure that the city will be part of net neutrality, privacy, and content distribution debates for the foreseeable future.


Analysis
Level 3 Communications has positioned itself as an integral part of the global communications network by developing information services and infrastructure that provide the backbone of much of the internet traffic and content distribution in the United States and continues to expand globally. As the technological middleman between companies that have been integral to the debates concerning net neutrality and new distribution deals between these companies, Level 3 Communications has become entwined in the current debate and represents a critical, potential challenge to these deals because of a vested financial interest in being kept in the information loop between these companies. At the same time that this information backbone may enable the of challenge of net neutrality deregulation, it may also pose a threat to internet privacy because of its extensive reach and Level 3 Communication’s probable willingness to allow government access to private networks. This network has become critical to the operations of the greater Atlanta, GA operations and information infrastructure and provide internet access throughout the city and its surrounding area and connects the transfer of information throughout the region and the globe. Level 3 Communication’s fiber optic cables encompasses Atlanta, GA and potentially transmits data to and from all of its residents and visitors and—along with its downtown data centers—ensures that the city will be part of net neutrality, privacy and content distribution debates for the foreseeable future.


Role as a Content Delivery Network (CDN) Provider
Level 3 Communications has built an extensive network covering most of the United States and the world that has allowed it to cultivate itself as a reliable and successful provider of content delivery networks with access to key regions across the country. The company is one of the fastest growing content delivery providers in large part because of its infrastructure development and partnerships with customers like Netflix, Inc. and Apple and is poised to become the second largest provider in the county. Although many consumers are familiar with internet service providers such as Comcast Corporation and AT&T and content and service providers such as Netflix, Inc. and YouTube, few consumers are aware of the content delivery networks and their providers that comprise the backbone of the internet and relay most information transmitted online. Content delivery networks operate by storing and transferring data between users and is especially suited to the transfer of streaming media over the internet. A user’s content is stored on multiple servers—potentially in the thousands—and is directed to a given user based on geographic location or usage that allows speed optimization, increased bandwidth and smoother content streaming. The servers and fiber optic networks cover most of the Atlanta, GA area and provide large portions of the region’s streaming services and bandwidth. Recently Level 3 Communications has expanded its content delivery network reach by teaming up with Google, Inc. to replace the Atlanta, GA based AT&T WiFi Services Unit as the nationwide provider of WiFi to Starbucks Coffee, Inc. stores.

level 3 mapMap of the Level 3 Communications data centers and fiber optic networks in Atlanta, GA.
Click to enlarge. The full Level 3 network interactive map can be found here.


Net Neutrality
As the provider of much of the critical backbone and infrastructure technology utilized in internet communication, Level 3 Communications may be positioned to become a key player in ongoing debates of net neutrality and has the potential to provide a challenge to its dismantling. Open Internet regulations—also referred to as ‘net neutrality’—has ensured that broadband providers have allowed open access to the internet by requiring providers be open and transparent about how they utilize and manage traffic on their networks, prohibited providers from blocking content on their networks, and prohibited providers from discriminating against internet traffic on their networks. With the January 2014 appeals court ruling striking down these rules and ostensibly permitting broadband providers to selectively limit internet traffic, Level 3 Communications’ own internet traffic and particularly its streaming centered content delivery networks may be detrimentally affected by the limitations of broadband providers and in turn slow traffic to users serviced by the content delivery networks—including users in the Atlanta, GA area. Tensions between Level 3 Communications and broadband service providers have been ongoing since 2010 when Level 3 Communications challenged Comcast Corporation’s attempts to thwart net neutrality by specifically charging Level 3 Communications more to deliver Netflix Inc. traffic to the broadband provider’s own networks. More recently, as one on Netflix Inc.’s three main content delivery network providers, Level 3 Communications has to the potential to be significantly affected by—but also potentially affect—content provider and broadcast provider deals that are altering net neutrality and the way content is delivered to users. The most recent deal between Netflix, Inc. and Comcast Corporation—which purportedly has Comcast Corporation charging Netflix, Inc. for direct access to its services—may have far-reaching consequences for both Level 3 Communications and consumers because the deal may potentially cutout the backbone of the network, bypassing it for privileged direct access to servers, and increasing speeds and service for certain users and not others. If these deals result in some companies receiving preferential treatment while slowing content from companies that have not brokered a deal and still rely on Level 3 Communications networks, consumers in areas such as Atlanta, GA where Level 3 Communications’ fiber optic cables, data centers and content delivery networks encompass much of the internet traffic in the city may be placed at a disadvantage when it comes to reliable streaming content delivery. It is unclear at this juncture how Level 3 Communications will respond to these deals, but the company’s rising stock prices suggest investors predict a positive future for the company.


Privacy and Surveillance Issues
As the information backbone of internet communications and the go between technological infrastructure provider for many companies and users, Level 3 Communication potentially has access to much of the private data and communication transferred over the internet, often without the original sender’s or intended receiver’s knowledge of Level 3 Communications’ role in the transfer. As more and more has been revealed about the National Security Agency’s monitoring and intercepting of private communications over multiple information networks, Level 3 Communications’ willingness to facilitate government spying over its fiber optic networks has come under fire. Recent reports that the National Security Agency has tapped into Google, Inc. and Yahoo!, Inc. traffic without either company’s knowledge by accessing Level 3 Communications’ fiber optic cables and data centers—such as the center operated in Atlanta, Ga—has implicated the company in the participation of the surveillance program. For its part, the company has responded to allegations by stating, “It is our policy and our practice to comply with laws in every country where we operate, and to provide government agencies access to customer data only when we are compelled to do so by the laws in the country where the data is located.” The company’s response suggests that any information transferred through its fiber optic network or data centers may potentially be intercepted without user knowledge and may pose a risk to the privacy of anyone connected to the network and that the company has put up little resistance to these intrusions. This risk is compounded by the fact that many users are unaware that these backbone infrastructure conduits even exist throughout the country or that many users’ data in an area such as Atlanta, GA will be routed through these networks and will potentially compromise all private and local communications. Although some companies like Apple, Google, and Cisco believe their international business will be negatively affected by the spying revelations, Level 3 claims the resulting nationalization of the Internet may, in fact, be a boon for business. As nations seek to build more nationally-enclosed Internet infrastructure, the logic goes, they will seek the services of firms like Level 3.


[1] LexisNexis Corporate Affiliations, “Level 3 Communications, Inc.,” LexisNexis, March 6, 2014.

Company Profile Contributor: Caren Pagel, Georgia State University, 2014.

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