Level 3 Restructures Channel

Denver-based Level 3 is divvying up channel responsibilities under three master resellers that will deal directly with most of its VARs, solution providers said. The restructuring began in December, and new partner contracts are being finalized, they said.

A Level 3 spokesman confirmed the changes but declined to comment on specifics.

Level 3 is one of the largest Internet backbone providers of data transport and related services. However, the company has been trying to take advantage of the growing opportunity in VoIP and is experiencing transitional pains, said Jeff Rothell, CEO and president of CentricVoice, Dallas, one of the three master resellers named by Level 3. The Level 3 spokesman would not identify the other two.

Solution providers last week said impending layoffs at Level 3, which will result in a workforce reduction of about 500 to 600 employees, may be due to the restructuring, as the carrier doles out management of its channel to the master resellers.

"Level 3 needs to scale [its infrastructure] to VoIP because that's where the world is headed, but they can't scale to support all the individual end customers from a billing, technical support, marketing and sales [standpoint]," said Emmet Tydings, president of AB&T Telecom, a master telecom agent in Gaithersburg, Md.

Rothell said the changes ultimately will be good for Level 3's channel because it will lower the barrier of entry for partners to sell more of Level 3's portfolio of voice and data services.

Level 3 requires a monthly usage guarantee of $50,000, which means partners have to sell at least that much of a single service per month, Rothell said. CentricVoice, however, plans to diversify its monthly usage guarantees into increments of $10,000, $15,000 and $25,000, thus enabling a greater number of partners to sell a broader range of Level 3 offerings, he said.