Property and equipment:

12 Months Ended

Dec. 31, 2013

Property and equipment:

Property and equipment:

2. Property and equipment:

        Property and equipment consisted of the following (in thousands):

	December 31,
	2013			2012
Owned assets:
Network equipment	$	404,426		$	375,230
Leasehold improvements		147,718			127,497
System infrastructure		79,811			71,769
Software		9,531			9,369
Office and other equipment		12,521			10,558
Building		1,532			1,471
Land		130			125
		655,669			596,019
Less—Accumulated depreciation and amortization		(521,290	)		(472,024	)
		134,379			123,995
Assets under capital leases:
IRUs		329,415			293,210
Less—Accumulated depreciation and amortization		(122,601	)		(106,030	)
		206,814			187,180
Property and equipment, net	$	341,193		$	311,175

        Depreciation and amortization expense related to property and equipment and capital leases was $64.3 million, $62.4 million and $59.7 million, for the years ended December 31, 2013, 2012 and 2011, respectively.

        The Company capitalizes the compensation cost of employees directly involved with its construction activities. In 2013, 2012 and 2011, the Company capitalized compensation costs of $7.4 million, $7.2 million and $7.1 million respectively. These amounts are included in system infrastructure costs.

        In the fourth quarters of 2013 and 2012, the Company exchanged certain used network equipment for new network equipment resulting in gains of $0.9 million and $0.7 million respectively.