Level 3 Reaches Settlement to Terminate Vendor Agreement With Allegiance Telecom

HostReview.com
Friday, March 5, 2004; 12:00 AM

BROOMFIELD, Colo., March 5, 2004 – Level 3 Communications, Inc. (Nasdaq:LVLT) announced today that it has settled a vendor agreement with Allegiance Telecom, Inc.

The settlement, which is subject to approval of the Allegiance bankruptcy court and other conditions, would terminate a multi-year contract Level 3 has to purchase wholesale dial access services, including the use of operating equipment, from Allegiance.

Level 3 assumed the contract with Allegiance as part of its acquisition of Genuity’s assets last year. To settle the contract, Level 3 has agreed to pay Allegiance $54 million in cash. The company has approximately $200 million of outstanding debt in the form of capital lease obligations that will be eliminated as a result of the settlement. The settlement is expected to have no impact on revenue, no material impact on Adjusted Communications OIBDA, and a positive impact on cash flow.

About Level 3 Communications
Level 3 (Nasdaq:LVLT) is an international communications and information services company. The company operates one of the largest Internet backbones in the world, is one of the largest providers of wholesale dial-up service to ISPs in North America and is the primary provider of Internet connectivity for millions of broadband subscribers, through its cable and DSL partners. The company offers a wide range of communications services over its broadband fiber optic network including Internet Protocol (IP) services, broadband transport, colocation services, Genuity managed services, and patented Softswitch-based managed modem and voice services. Its Web address is www.Level3.com.

The company offers information services through its subsidiaries, Software Spectrum and (i)Structure. For additional information, visit their respective Web sites at www.softwarespectrum.com and www.i-structure.com.