Level 3 Expands in Northern California

Level 3 Communications (NYSE:LVLT, news, filings) brought its local markets initiative to northern California.  They will be grouping together the markets of San Francisco, San Jose, Oakland, and Sacramento with a general manager, and will be adding both capacity and staff in the region.  This is the second such initiative on the west coast, the first being up in Seattle last summer. No doubt we will see a southern California initiative at some point as well, however San Francisco is the last of the markets the company has publicly scheduled.

Unlike on the east coast where they acquired multiple metro footprints of different types per market, Level 3’s metro assets on the west coast are more homogeneous.  They consist of the original Level 3 build plus a bit from Looking Glass, and whatever metro bits and pieces Broadwing and WilTel had (not much).  Because that footprint has mostly wholesale origins, Level 3 begins its SF Bay area initiative in the mid-market enterprise segment with 450 miles of metro fiber but relatively few actual enterprise customers relative to its other markets.

So far, the company has said that its local markets initiative has been having a very positive effect on sales where it has been introduced.  However, those effects have thus far not been large enough to really show up in the overall numbers.  Perhaps that is both due to the length of sales cycles and to more general churn related to both the economy and internal shifts in focus.  In 2010 the market will be looking for that to change as the effort gains both scope and momentum.

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Categories: Internet Backbones · Metro fiber