Key Stats
- Founded: 1985 as Kiewit Diversified Group (renamed Level 3 in 1998)
- Headquarters: Broomfield, Colorado
- Peak Revenue: $8.22 billion (2015)
- Employees at Peak: 12,500 (2015)
- Acquired by CenturyLink: November 2017 for $34 billion
Level 3 Communications was an American telecommunications and internet service provider headquartered in Broomfield, Colorado. The company operated one of the world’s largest Tier 1 internet backbone networks.
Level 3 provided IP-based communications services to enterprise, content, government, and wholesale customers. The company delivered voice, data, video, and managed network solutions across North America, Latin America, Europe, and parts of Asia.
At its peak, Level 3 was the largest competitive local exchange carrier (CLEC) in the United States and ranked third among fiber-optic internet providers by coverage. The company delivered streaming content for Netflix and Apple over its content delivery network.
In November 2017, CenturyLink (now Lumen Technologies) completed its acquisition of Level 3. Jeff Storey, Level 3’s president and CEO, became CenturyLink’s Chief Operating Officer and later CEO.
Level 3 Communications Competitors
Level 3 Communications competed in the Tier 1 internet service provider market against major telecommunications carriers. The company’s main rivals included both traditional telephone companies and specialized backbone providers.
| Competitor | Type | Headquarters |
|---|---|---|
| AT&T | Tier 1 ISP / ILEC | Dallas, Texas |
| Verizon | Tier 1 ISP / ILEC | New York, New York |
| Cogent Communications | Tier 1 ISP | Washington, D.C. |
| NTT Communications | Tier 1 ISP | Tokyo, Japan |
| Tata Communications | Tier 1 ISP | Mumbai, India |
| Deutsche Telekom | Tier 1 ISP | Bonn, Germany |
| GTT Communications | Tier 1 ISP | McLean, Virginia |
| Zayo Group | Fiber Network Provider | Boulder, Colorado |
| Arelion (formerly Telia Carrier) | Tier 1 ISP | Stockholm, Sweden |
| Sprint (now part of T-Mobile) | Tier 1 ISP | Overland Park, Kansas |
Level 3 Communications History
Peter Kiewit Sons’ Inc. creates Kiewit Diversified Group (KDG) to manage non-construction businesses.
James Crowe launches MFS Communications under KDG, building fiber-optic networks for local telephone competition.
WorldCom acquires MFS Communications for $14.3 billion after MFS purchased UUNET Technologies.
KDG renames to Level 3 Communications and begins trading on NASDAQ (ticker: LVLT). Company raises $14 billion.
Level 3 completes 16,000-mile North American fiber network. Stock reaches $130 per share with $44 billion market cap.
Level 3 acquires Genuity’s network assets for $60 million in cash, gaining historic AS1 from BBN Technologies.
Aggressive acquisition period: WilTel Communications, Broadwing, Looking Glass Networks, Progress Telecom, TelCove, ICG Communications, and Savvis CDN business.
Level 3 acquires Global Crossing for $3 billion, gaining international fiber routes and submarine cable access in 50+ countries. Moves to NYSE.
Level 3 acquires TW Telecom for $5.7 billion, expanding enterprise fiber reach and metro network presence.
CenturyLink completes $34 billion acquisition of Level 3. The combined company later rebrands as Lumen Technologies.
Level 3 Communications Co-founders
James Q. Crowe
Founder and CEO of Level 3 Communications from 1997 to 2013. Previously launched MFS Communications under Peter Kiewit Sons’ and led it to a $14.3 billion sale to WorldCom. Recruited 18 former MFS executives to build Level 3.
Walter Scott Jr.
Chairman of Peter Kiewit Sons’ from 1979 and Level 3’s longtime board chairman. Provided financial backing and business credibility that helped Level 3 raise $14 billion. Retired from Level 3 board in 2013.
Level 3 Communications Revenue
Level 3 Communications experienced steady revenue growth through the 2010s, driven by acquisitions and expanding enterprise network services. The Global Crossing acquisition in 2011 and TW Telecom deal in 2014 produced the largest revenue increases.
Level 3 Communications Market Cap
Level 3’s market capitalization fluctuated significantly over its public trading history. The stock peaked at $44 billion during the dot-com bubble in 2000 before declining sharply. By the 2016 CenturyLink acquisition announcement, Level 3 had a market value of approximately $19.4 billion.
Level 3 Communications Acquisitions
Level 3 Communications pursued an aggressive acquisition strategy throughout its history. The company used these deals to expand its network footprint, gain new customer bases, and add service capabilities.
The first major acquisition came in February 2003 when Level 3 purchased Genuity’s network assets for $60 million. This deal brought Level 3 the historic AS1 autonomous system number originally assigned to BBN Technologies, one of the original ARPANET contractors.
Starting in late 2005, Level 3 accelerated its acquisition pace. The company paid $486 million (cash and stock combined) for WilTel Communications Group, gaining 3,000 additional route miles of fiber and access to 50 new markets. WilTel’s Vyvx video transport division became part of the deal.
Throughout 2006, Level 3 acquired Progress Telecom, ICG Communications ($163 million), TelCove, and Looking Glass Networks. In 2007, the company purchased Broadwing Corporation and the content delivery network business from Savvis. These deals added metro fiber networks, wholesale dial-up customers, and CDN capabilities.
The 2011 acquisition of Global Crossing for $3 billion (including $1.1 billion in assumed debt) transformed Level 3 into a truly international carrier. Global Crossing contributed submarine cable access, Latin American operations, and owned network presence in over 50 countries.
Level 3’s final major acquisition came in October 2014 when it purchased TW Telecom for $5.7 billion. TW Telecom brought 75,000 on-net buildings and metro fiber networks in major U.S. markets. This deal pushed Level 3 past Verizon to become the second-largest domestic Ethernet provider behind AT&T.
In July 2015, Level 3 acquired Black Lotus, a DDoS mitigation provider, to strengthen its security service portfolio before the company itself was acquired by CenturyLink.
FAQs
What happened to Level 3 Communications?
CenturyLink acquired Level 3 Communications for $34 billion in November 2017. The combined company later rebranded as Lumen Technologies in 2020.
Who founded Level 3 Communications?
James Q. Crowe founded Level 3 in 1997 with backing from Walter Scott Jr. and Peter Kiewit Sons’. Crowe previously built MFS Communications.
When was Level 3 Communications founded?
Level 3 was founded in 1985 as Kiewit Diversified Group. The company renamed to Level 3 Communications and went public in April 1998.
What does Level 3 mean in telecommunications?
The name references Layer 3 of the OSI networking model, which handles IP routing. Level 3 built its network specifically optimized for internet protocol traffic.
Is Level 3 a Tier 1 provider?
Yes. Level 3 operated a Tier 1 internet backbone, meaning it reached the entire internet through settlement-free peering without purchasing transit from other networks.