Level 3 Communications announced that it has acquired Progress Telecom, a provider of wireless and land-line phone services in the Southeastern United States, for about $137 million in cash and stock.

Under the terms of the deal, Level 3 will pay $68.5 million in unregistered shares of its stock and $68.5 million in cash to Progress Energy and Odyssey Telecorp, the joint owners of Progress Telecom.

Level 3, which operates one of the nation's largest IP-based fiber-optic networks, said it will not take over some assets of Progress Telecom's wireless tower attachment business, as well as some of the company's interests in marketing distributed antennae systems and providing tower services to other mobile carriers.

The company has also reserved the right to pay cash in lieu of providing common stock as part of the deal, which is expected to close some time during the second quarter of 2006.

Progress, which recorded 2005 sales of roughly $20 million, controls an estimated 9,000 miles of land line, including 29 metropolitan networks ranging from Miami to New York, along with 31 wireless switching hubs in the Southeast. The firm, which primarily serves regional wireless services carriers, also provides connections to international cable landings in Florida.