EDITORIAL TAKES A WRONG TURN WITH ANTI-TOLLWAY BIAS
LETTERS TO THE EDITOR TELECOM'S NEW LEVEL
I totally disagree with your editorial's condemnation of the I-355 extension and the broader criticism of the Illinois State Toll Highway Authority ("Yes, another chapter for a $60-million-a-mile tollway," Jan. 25). As a daily customer of the Illinois toll road and a civil engineer, I believe there are no better-maintained roads in the state of Illinois than the roads of the Illinois Toll Highway Authority.
Given the limited funds for road expansion and maintenance available to the Illinois Department of Transportation, the creation of the toll authority was a politically expedient way for politicians to build new, needed road systems without visually increasing taxes. They are built, maintained and expanded on a user/fee basis.
There is no doubt the tollway deserves some criticism for its past administration, but it remains a great road system and will be an even greater road system in the future.
To the detractors, who want a free ride, have them take the side streets. The beauty of the road systems is, if you want a faster, safer transportation system, you pay for it in terms of tolls.
Another point in your editorial touched upon the projected road costs, and suggestions that there may be better ways to move people in the suburbs other than the toll road systems.
You suggest alternative transportation projects such as rail lines or rapid transit between the suburbs as an alternative. If you have a hard time justifying the servicing of debt on toll roads during their early years of operations, you would be even harder-pressed to justify the cost of those public transportation dollars on the same basis of a recovery ratio.
Charles W. Ostrander
Illinois Masonry Institute
HELP FOR LITTLE GUYS
So, what about the little guy?
Leigh Page's Feb. 1 spotlight on employee assistance programs (EAPs) once again raises the question, "How can a really small business take care of employees and protect their bottom line?" ("Stress breaker").
The article spoke wonderfully to EAPs -- a great resource I highly recommend as part of a company's "well-balanced diet" -- but how can small employers obtain access to services like these for reasonable costs when many companies won't deal with companies with fewer than 50 employees?
As coordinator for the Chicagoland Chamber of Commerce's Drug-Free Workplace Program, I'd like to suggest the little guys give us a call, as over 700 companies have used our resources in the past two years.
I work with many small organizations in implementing drug and alcohol programs (for as little as $30) and obtaining access to important providers of EAPs, drug testing, legal and treatment services. Our own chamber's EAP, Employee Resource Systems Inc., also tailor-makes programs for organizations such as ours as well as our broad-based members.
Drug-Free Workplace Program
Chicagoland Chamber of Commerce
DILLY OF A DELI
No Jewish delis?
Ever hear of Manny's? Best Jewish deli this side of Manhattan. Only the bagels are better in New York City ("Hit-and-miss deli doesn't deliver," Jan. 25).
Your reviewer has a Jewish name . . . but is she really?
J. H. Noonan
POWER OF POPULARITY
Robert Reed's column ("Whom will the GOP follow: Dr. Hastert or Mr. Hyde?"), came across as advocates of jury nullification who accept, if not embrace, the Democratic Party's argument that popular and powerful Democrats should be exempt from the rule of law.
Mr. Reed argues that because Clinton is popular and powerful, the Democratic Party will keep him in office, no matter what. He adds that Mr. Hyde should have accepted "some type of resolution" and should never have sought impeachment.
Mr. Reed would change his mind if he ever has a legal dispute in which the other side is more popular and powerful than he. He would soon realize that Mr Hyde and the House managers have more than common sense. They have political courage.
Crain's Chicago Business welcomes responses from readers. Letters should be as brief as possible and may be edited. They should be sent to Letters to the Editor, Crain's Chicago Business, 740 N. Rush St., Chicago, Ill. 60611. All letters must be signed. Please include a telephone number. You may also send letters via e-mail at [email protected] Past articles can be retrieved via our Web site, www.crainschicagobusiness.com.
TELECOM'S NEW LEVEL: FORMER MFS CHIEF GO... 02/22/99 Crain's Chicago Business
Level 3 Communications Inc., a Colorado-based company that's launching an intensive Chicago-area expansion, aims to level its competition by driving corporate telecommunications costs through the floor.
Level 3 recently started peddling data-transmission and other services to large Chicago-area companies from a new, 60,000-square-foot facility at 111 N. Canal St.
The effort attracted little attention amid the marketing wars waged by long-distance titans AT&T Corp. of New Jersey, Kansas-based Sprint Corp., Mississippi's MCI Worldcom Inc., and local-service provider Ameritech Corp. and its upstart competitors.
Potentially, "they're a competitive threat to everybody," says Terrence Barnich, president of Chicago consulting firm New Paradigm Resources Group Inc.
Indeed, Level 3 is among a handful of national companies with the potential to radically shift the competitive playing field by developing next-generation telecommunications systems.
Level 3 plans to spend nearly $60 million in the Chicago area over the next several years building a local network that will be one of the hubs of a $9-billion global system. The network is designed to transmit voice, data and video using Internet technology at a fraction of the cost of traditional telephone networks.
"Everything we're going to provide is going to continually get less expensive," says James Ball, 36, Level 3 regional vice-president in Chicago.
Whether Level 3 can deliver depends on a host of factors -- from overcoming technological hurdles to building a customer base.
The ambitious upstart, with $392 million in sales last year and a whopping $15-billion market capitalization, is being watched closely.
Level 3 already has two key components critical to success in the telecom business: access to capital, and proven leadership in 48-year-old President and CEO James Q. Crowe.
Stock price doubles
The company was spun off in 1997 from Omaha, Neb.-based construction/mining/telecommunications concern Peter Kiewit Sons Inc. with some $4 billion in cash from Kiewit and the proceeds of a public debt offering. Last week, Level 3 registered to offer an additional 20 million shares, the sale of which is expected to raise about $1 billion.
Since its spinoff, Level 3's stock has more than doubled, trading recently in the $50 range.
"Jim Crowe's idea is getting a good degree of recognition from investors," says analyst Ed Mullane Jr. of New York-based New Japan Securities International.
Level 3 is Mr. Crowe's second telecom startup. His first -- MFS Communications Inc., which had an operations headquarters in Oakbrook Terrace -- sold to WorldCom Inc. in 1996 for $14 billion.
He bolted WorldCom almost immediately to found Level 3's predecessor, Kiewit Diversified Group Inc., taking with him a handful of key MFS executives (Crain's, Dec. 15, 1997).
His strategy at Level 3: build advanced fiber networks for a not-so-distant future when he and others envision that more-efficient Internet technology will supplant traditional telephone circuitry.
(The shift will be from 100-year-old circuit-switched networks designed for voice communications to packet-switched networks using the Internet. In the latter, information is broken into small packets that share lines with other transmissions, then are reassembled at the receiving end. The technology packs far more traffic on a single strand of fiber than traditional circuit switches, in which each transmission hogs a dedicated line.)
This changeover is happening first for large businesses moving huge volumes of information. But gradually, the technology is expected to extend not only to smaller businesses, but to consumers.
Meanwhile, industry observers are watching to see whether Mr. Crowe can repeat his MFS success at Level 3.
"It's all in the execution," says Robert Taylor, an MFS alum and CEO of Chicago-based Focal Communications Corp., a privately held competitive local exchange carrier. "They're going to have to make sure they deliver what they promise, and do it better than everyone else."
Level 3 is targeting Fortune 500 companies with services such as dedicated private lines, as well as heavy service users such as Internet service providers and Web site developers.
Looking for customers
As the technology evolves to transmit voice better, Level 3 intends to offer standard long-distance and local dial-tone service.
For now, the company is leasing transmission lines until it completes its own 16,000-mile U.S. network, which will link 50 cities. Each will have a "gateway" or electronic interchange like Level 3's recently completed facility at 111 N. Canal St.
"For a lot of folks," says Mr. Ball, "our gateway will function as an outsourced back office."
Mr. Ball's immediate challenge is to sign up customers and initiate service. Competitors are plentiful. Companies such as Denver-based Qwest Communications International, New York-based Frontier Corp. and MCI Worldcom offer inter-city private line services.
For local access lines and connections to modems and wholesaler service, Level 3 will compete against a variety of players, from Internet service providers to competitive local exchange carriers like Focal.
The next 12 months will be critical for Level 3.
"You can begin to determine the kind of customers they're going to get," says analyst Mr. Mullane. "The question is: Will they provide the size and the volume needed to offset the huge investment" in infrastructure?
Level 3 Chief Operating Officer Kevin O'Hara says the company is on track, with service offered in 17 cities: "We're very pleased with our early success."