Md. expects millions from fiber-optics pact

Colo. firm wins right to lay new lines along public rights of way

June 04, 1999|By Mark Ribbing | Mark Ribbing,SUN STAFF

The Maryland Board of Public Works has approved a telecommunications-equipment contract that is projected to bring the state between $49.8 million and $222.8 million in revenue over the next 40 years.

The deal calls for Level 3 Communications Inc. of Louisville, Colo., to lay fiber-optic communications lines in the public rights of way along 330 miles of highway in Maryland.

The agreement does not preclude others from using the rights of way.

State officials said the high-speed fiber-optic lines will improve data communications throughout the state, especially in rural parts of Western and Southern Maryland.

"I think it positions Maryland well to be able to compete effectively as our economy begins to shift to more of a [high-technology] focus," said Preston Dillard, director of the telecommunications division of the state's Office of Information Technology.

Dillard said Maryland taxpayers will pay nothing in the agreement, aside from charges on Level 3 communications services used by the state. Dillard said those costs will be paid out of revenue the state takes in from the network.

The state will earn revenue from the resale of communications services carried along the fiber-optic lines, and will receive a 20 percent discount on Level 3 communications services.

Level 3 will reap revenue from its sales of services on the network.

The Level 3 fiber-optic line will be strung along the medians or roadsides of five highways throughout the state, from Interstate 95 in the east to Interstate 68 in the state's western corner. Construction is scheduled to begin this month and end by December 2000.

John Scarano, Level 3's senior director for network planning and development, said the agreement with Maryland nearly completes the company's nationwide right-of-way network.

Scarano declined to say how much his company will garner from the Maryland piece of the network. "We don't have those kinds of projections at this point," he said.

The Level 3 deal is part of a state open bidding process that began in 1996 and will continue until January 2000.

Under the program, private companies obtain the use of public rights of way in return for financial benefits or services to the state.

Dillard said the Level 3 agreement was the largest communications network accord reached under the program.

Level 3 is building a 25,000-to-30,000-square-foot regional office at 300 W. Lexington St. in downtown Baltimore.

The office, which will handle the company's metropolitan Baltimore communications operations, is scheduled to open in October.

Scarano said the center could employ as many as 30 people over the next three years, but only a third that many employees will be needed if the company fails to get a franchise to provide service in Baltimore.

Pub Date: 6/04/99

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