Telecom giant Level 3 Communications is looking to boost its position in the content delivery network (CDN) industry by undercutting competitors. Level 3 plans to sell CDN services at the same rates it sells plain-vanilla Internet bandwidth. If that claim holds up, it could spell trouble for competitors like Akamai (AKAM) and Limelight (LLNW), which market themselves as premium services and charge premium prices. Because Level 3 already operates a massive international telecom network, its CDN services ride on its own pipes, meaning it doesn’t have to buy bandwidth from another telco the way other CDNs do.
(Disclosure: SAI chairman Kevin Ryan is an investor and CEO of Panther Express, a NY-based CDN.)