Level 3 Communications Question #1- Beth Ellis

The planned strategy of Level 3 Communications in the late 1990s was very direct and purposeful. Jim Crowe, CEO of Level 3, believed that “there was not enough fiber-optic capacity to go around and that ‘demand will far outstrip supply for the foreseeable future’” (Hill 23). He purposed that Level 3 build a state-of-the-art fiber-optic network, which would help with this supply issue. He wanted to raise money to build the fiber-optic network, and then cut the prices so that it would attract potential users. His main focus was on corporations, Internet service providers, and traditional telecommunication companies. Research had shown that this supply and demand issue was of such a huge issue that many other companies thought of the same exact planned strategy.

This was what would be the downfall of Level 3 Communications. It was only after the company was more than $13 billion in debt that research showed that the growing percentage of Internet traffic was not actually 1,000 percent a year, but actually at a mere 100 percent a year. With a growth rate such as that, Level 3 Communications and its competing corporations would not find that the supply of fiber-optics would run out, making it nearly impossible to stay afloat.