HyperCube Files Complaints Against Level 3 in New York and Texas

HyperCube Forced to Sue Level 3 Again For Its Illegal Refusal to Pay for HyperCube's Services

• Press Release
• Source: HyperCube LLC
• On 6:20 pm EDT, Monday October 26, 2009

LANCASTER, Texas, Oct. 26 /PRNewswire/ -- HyperCube LLC, a competitive local exchange carrier, today announced that it has filed complaints against Level 3 Communications (Nasdaq: LVLT - News) due to Level 3's unlawful refusal to pay for tariffed access services performed by HyperCube in connection with Level 3's provision of toll-free calls that originate and terminate in New York and in Texas. The complaints were filed today with the New York Public Service Commission and the Public Utility Commission of Texas, respectively.

As of October 7, 2009, Level 3 owes HyperCube approximately $22 million for interstate and intrastate calls. This amount grows each month as HyperCube continues to satisfy its statutory duty as a common carrier to provide services to Level 3 despite its illegal refusal to pay HyperCube's approved tariffed rates for the work it performs for Level 3.

"Unfortunately, our attempts to find a fair and sensible solution to this matter have been rebuffed by Level 3 and, as a result, we were compelled to take this action," said Ronald R. Beaumont, President and CEO of HyperCube. "Level 3's decision to stop paying HyperCube for services provided at approved tariff rates is a violation of state tariffs and state law and signals competitive retribution and unreasonable discrimination in violation of the Telecom Act. We are also concerned that Level 3's refusal to pay may in part be due to an inability to pay. We look forward to resolving these matters expeditiously."

From November 2005 through November 2007, Level 3 paid HyperCube for access services pursuant to HyperCube's valid intrastate and interstate tariffs. But shortly after announcing that the company was sharply reducing guidance for its financial performance in November 2007, Level 3 unilaterally began refusing to pay HyperCube, despite the fact that it continues to receive, accept, and benefit from intrastate access services and database query services provided by HyperCube.

On May 8, 2009, HyperCube commenced a similar action to those announced today, filing a complaint before the California Public Utility Commission (CPUC) aimed at requiring Level 3 to pay its outstanding debt in that state as well. Most recently, HyperCube filed a motion to compel Level 3 to place approximately $5.3 million in escrow with a third party agent pending resolution of the current action between HyperCube and Level 3 before the CPUC.

The complaint cites a number of examples in the public record that suggest Level 3 has been and continues to be in financial trouble. HyperCube believes these financial troubles may be the reason Level 3 is refusing to pay its bills.

On December 28, 2008, Standard & Poor's rating agency downgraded the corporate credit ranking of Level 3's parent to "selective default." In addition, a number of groups representing Level 3 shareholders have filed securities fraud complaints against Level 3's parent, which were consolidated in federal court on February 27, 2009. Given the current state of the economy and the public record on Level 3's financial difficulties, HyperCube continues to believe that its request for Level 3 to place the money it owes HyperCube into an escrow account is reasonable.

Today's filings come in the wake of what appears is becoming a pattern with Level 3. Papers filed recently with the Indiana Utility Regulatory Commission reveal that Level 3 is involved in a national billing dispute with Verizon that likely totals millions of dollars.

About HyperCube

HyperCube LLC is a leading provider of local and national tandem switching services to wireless, wireline, cable and VOIP carriers. HyperCube operates a comprehensive national network, which provides an alternative to and significant savings over traditional carrier networks. HyperCube's network is highly flexible, and allows carriers to customize traffic routing and reduce costs. HyperCube is well positioned to capitalize on significant growth in wireless traffic volumes and in the technology convergence to IP-based telephony as a neutral, unaffiliated carrier. To learn more about HyperCube, please visit http://www.hypercube-llc.com.

    Contacts:
               Kelly Sullivan / Tim Lynch
               Joele Frank, Wilkinson Brimmer Katcher
               (212) 355 4449

Buzz up!