Level 3, XO restructure network deal

Level 3 Communications and XO Communications have signed a new network services agreement, restructuring a prior contract. Under a 1998 contract, XO agreed to purchase $700 million in fiber-optic capacity and network services from Level 3. XO already has paid for more than 60 percent of its commitment. But some financial analysts recently feared that XO might default on its payments to Level 3, a spokesman said. Under the revised agreement, Level 3 will now apply $128 million in payments XO previously made for network capacity in Europe toward the company's $700 million North American commitment. XO also will relinquish certain other rights. The plan calls for XO to move its network traffic from links leased from other providers to capacity it has obtained from Level 3.