The flip side to the sagging stock value is the opportunities it creates for a buyout, something James Crowe, Level 3 chief executive officer, intends to do with the $500 million investment his company garnered in an announcement Monday.

"The ongoing shakeout is creating extraordinary opportunities, as telecommunications companies, their network assets and customer bases become available," he said. "We are fortunate to have both network management expertise and financial dry powder, which will allow us to continue pursuing opportunities that create value for our stockholders."

The half-billion in spending money comes courtesy of three investment firms, led by Longleaf Partners Funds, which took $300 million in "subordinated" notes. Berkshire Hathaway (owned by tech-leery billionaire Warren Buffet) and Legg Mason, Inc., each contributed $100 million to the Level 3 investment.

In addition to telecom buyouts, Crowe said the monies raised would be used to reduce capital expenditures and other back-office expenses.

Level 3 said its new backers have attributes that make it a desirable investment risk, as opposed to some of the other troubled carriers, like WorldCom .

Liquid resources and strong financial backing are scarce and valuable assets in today's telecommunications world; "Level 3 has both," said Buffet. "Level 3 is well equipped to seize important opportunities that are likely to develop in the communications industry."

While many backbone providers like WorldCom, Global Crossing and Qwest Communications are going through legal and financial troubles these days, Level 3 has escaped largely unscathed. Promising investors (and federal regulators) its accounting books are in order, Crowe dodged a bullet.

That's largely due to the financial fire it avoided last year, when it laid off 25 percent of its employees and went on a self-imposed diet to reduce corporate fat.