Here's Why Level 3 Might Still Be a Good Bet

• Report this Comment On November 28, 2012, at 12:30 PM, tvincent995 wrote:

  Nice product placement of the Apple logo notebook.

• Report this Comment On November 28, 2012, at 5:47 PM, TMFMileHigh wrote:

  tvincent995,

  >>Nice product placement of the Apple logo notebook.

  Too bad Apple is paying me for that, right?

  Ah well. Thanks for writing and Foolish best,

  Tim

  --

  Tim Beyers

  TMFMileHigh, Motley Fool Rule Breakers Analyst, Supernova Odyssey I Portfolio Contributor

  Web: http://timbeyers.me

  Twitter: @milehighfool

  Tumblr: http://timbeyers.tumblr.com/

• Report this Comment On November 29, 2012, at 8:10 PM, BillRamthun wrote:

  Hi Tim,

  I like the suggestion, but your analysis glosses over the cost of hooking residences to the Internet backbone.

  Level 3 Communications is the backbone of the Internet and a long haul carrier. Level 3 also has metro rings in all the major markets and spends lots of capital each year bringing buildings in the major markets "on-net".

  Providing Gigabit connectivity to the home requires trenching fiber from the backbone to all the places where you're wanting to deliver service. The logistics of networking don't allow you to hook your house directly to the backbone but instead you need to connect to intermediate layers of distribution routers. Plus, obtaining the right-of-ways for the new fiber runs to residential areas is painful. All of this costs lots of money.

  So I like the idea and it can be done, but I think it’s going to cost more than you suggested.

  But what if Google purchases Level 3 as a cost avoidance maneuver? Maybe purchasing Level 3 is “cheaper” than continuing to pay for the huge bandwidth the Google data centers consume. This would also put Google in the drive seat if the Net Neutrality discussions arise again. Now, This may be worth doing a cost analysis on.

  Cheers,

  -Bill

• Report this Comment On November 30, 2012, at 10:03 AM, carlkiefer wrote:

  So, you really think Google would be willing to do a take under as outlined in your commentary? I see that you reference Apple also, and the Level 3 story continues to remind me of "Forrest Gump," with them being "the stupidest SOB's" that God has ever created while watching them run at super human speed in the wrong direction on the football field at the stadium filled with fans.

  As an owner who has been watching them build the most advanced ALL IP "global" network for nearly fifteen years, with them accumulating via acquisitions, network assets at "cost new" now exceeding $40B in PP&E, and Forrest himself saying that their "network" couldn't be replaced for $23B today--permits, row's, etc.-- I am patiently waiting for Google who has been leasing LVLT's LONG HAUL backbone fiber since day 1--an expiration looms on their horizon--to be so bold.

  I suppose if they were to make such an insulting offer, even the Oligopolists in Telecom and Cable Land would finally flinch and pay up as part of a bidding war like the world has not seen since The Good Ole Days of Railroad Barons building "CORNERS" to trap each other like "The Northern Pacific!"

  Should that happen; however, end users in America specifically, would be cheated of their internet according to the speeds and formats that Level 3 has always envisioned.

  Fool on, and fool up as you will, but these people with Omaha roots are a lot smarter than Google Geeks would give them credit for. Let the building of connecting eyeballs around the globe "seamlessly" or "end to end" continue through Level 3's factory.

  Forward generations will be thankful, and incumbent shareholders would have found great humility by earning their keep in staying the course while exercising the Patience of Job.

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