Level 3, XO Communications reach peering agreement

Communications services providers Level 3 Communications, Inc. (NYSE: LVLT) and XO Communications say they have reached a long-term settlement-free Internet traffic exchange agreement. The peering agreement is based on the bit-mile balance approach and will ensure that the companies’ respective customers can exchange data with each other.

The bit-mile peering approach measures both the volume of traffic exchanged and the distance over which that traffic is carried by each fiber-optic network. The two companies say that each network will carry about the same bit-miles of traffic, which will promote the “settlement-free” part of the agreement and make the cost of sharing networks approximately the same for each service provider.

The agreement also includes provisions to add capacity and new interconnection locations as traffic growth warrants.

"Level 3's primary focus is on providing quality service for Internet consumers," said Jack Waters, Level 3's chief technology officer. "We look forward to working with our peering partners to drive broader adoption of this bit-mile model to ensure fair and equitable interconnection. We are also working with providers of traffic-flow monitoring systems to make the measurement process straightforward and consistent across the industry."

"XO Communications supports equitable settlement-free peering to ensure fair and unconstrained interconnection," said Randy Nicklas, senior vice president and chief technology officer at XO Communications. "This agreement will ensure a balanced backbone cost burden between our two networks as we continue to grow while providing high-quality service for our respective customers."

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