capacity on its planned undersea fibre-optic network to closely held international phone company North American Gateway Inc. Closely held Project Oxygen plans to begin construction on the 104,400 mile global network next year. Toronto-based North American Gateway plans to use the network to connect customers in North America and Europe.

The agreement puts Project Oxygen one step closer to paying for the $8 billion network, which will connect 74 countries. The company, which is backed by about 90 phone companies, is building the network to meet mushrooming demand for data traffic spurred by the Internet.

North American Gateway provides international phone services in the US and Canada, and plans to expand to the UK and other European countries. The agreement gives the company lines to carry as much as 100 gigabits of information a second between any two points on the network.