Level 3 Communications (NAS: LVLT) is having a good quarter in many ways. Good enough to convert a longtime skeptic like me? Not so much.

Shares have climbed 34% over the last three months, bringing the one-year return to a fantastic 92%. And last night's second-quarter report cemented the market's conviction that Level 3 belongs at these levels.

Consolidated revenue grew 2.6% year over year to $932 million, somewhat below Street estimates of $937 million. Core network services advanced across the board, with a particularly hefty jump in the European service segment. Heavy price pressure from rivals in the high-speed Internet connectivity segment wasn't bad enough to erase growth in that business, as demand for these lines remains strong.

If you're gasping over the 40% year-over-year drop in "other" sales, thinking that there might be something wrong with the content delivery network services, don't despair: The core networks division includes CDN services, and management likes the growth happening there.

Akamai Technologies (NAS: AKAM) and Limelight Networks (NAS: LLNW) aren't killing Level 3's content delivery business, though that fact might be obvious if you've seen Akamai's own report today. No, sir: CDN sales more than doubled year over year, and they now make up 2% of Level 3's core revenue.

I'm also starting to see the value in the pending merger with long-range networker Global Crossings (NAS: GLBC) . On the earnings call, Level 3 CEO Jim Crowe said that content delivery is an essential part of future communications offerings, not a stand-alone afterthought. Bundling CDN with high-speed data pipes creates a value-added product that networking rivals AT&T (NYS: T) and Verizon (NYS: VZ) may find difficult to match. So expanding the network side of the business makes perfect sense when you marry that to the company's newfound belief in CDN services.

Level 3 reported an in-line $0.09 adjusted net loss per share and very thin free cash flows, as big capital expenses balanced out non-cash amortization and depreciation adjustments. That's all right if -- and only if -- you see Level 3 building its future right now, and preparing to slow down on the heavy capital charges further down the line. That's unlikely, given Level 3's very long history of negative cash flows, but anything is possible.

I think the company's heading down a healthy road, but I remain skeptical of the stock as an investment. After reading this free report, you might agree that there are better plays available in the high-speed networking sector. Click here to get your copy now -- it's free, so you've got nothing to lose.

At the time this article was published Fool contributor Anders Bylund holds no position in any of the companies discussed here. Motley Fool newsletter services have recommended buying shares of Akamai Technologies and AT&T. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio, follow him on Twitter or Google+, or peruse our Foolish disclosure policy.

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