December 10, 2001 -- Level 3 Communications, Inc. (Nasdaq: LVLT) announced it has reached an agreement to acquire the McLeodUSA Incorporated (Nasdaq: MCLD) wholesale dial-up access business assets (formerly Splitrock Services) for $55 million in cash consideration and the assumption of certain operating liabilities related to that business.

Under the terms of the agreement, the acquisition includes customer contracts, approximately 350 POPs (Points of Presence) across the U.S. and the related facilities, equipment and underlying circuits. In addition, the parties entered into certain operating agreements enabling McLeodUSA to continue to support its in-region customers. The acquisition enables Level 3 to provide managed modem service in all 50 states with a coverage area that includes 80 percent of the U.S. population, up from 37 states and 57 percent of the U.S. population.

The transaction is subject to Hart-Scott-Rodino approval and customary closing conditions, and is expected to close during the first part of 2002.

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