Back in April, Level 3 Communications – one of the world’s six Tier 1 Internet operators – announced a $3 billion agreement to purchase Global Crossing, a provider of fully integrated and interoperable IP and legacy services. Once complete, the acquisition would produce a company with connections to over 70 countries and ownership over networks in more than 50 countries, which Level 3 claims would allow it to better serve governments, carriers, content providers and businesses throughout Europe as well as North and Latin America.
Until recently, XO Communications strongly protested the merger, claiming it would give rise to a “global colossus” in the market that would cause service quality to drop and prices to sky rocket – something that would clearly not be in the public’s interest. Randolph Nicklas, the chief technology officer for XO filed a declaration with the Federal Communications Commission that alleged the proposed acquisition would be a catalyst for Level 3 to terminate Internet peering deals with additional providers of Tier 1 networks and in its place stipulate payment to exchange traffic.
However, in a message that was recorded with the Federal Communications Commission in early August, it was noted that Level 3 was prepared to amend its arrangement with XO because it believes that “XO now meets, and is willing to embrace, the framework of Level 3’s developing peering policy.”
Thankfully for Level 3, an additional letter filed last month with the Federal Communications Commission reports that XO now feels the acquisition is in the public’s interest; but when pressed for answers, outside counsel for XO – Thomas Cohen – declined to go into detail on the agreement.
As a result, both Global Crossing and Level 3 are now asking the Federal Communications Commission – who is nearing the half-way mark on the 180 day timeline for reviewing the contract – to approve the merger due to the fact that there is nothing left for the agency to investigate. Representatives for the two companies had informed the Federal Communication Commission in August that “postponement in attaining authorization for the matter “would result in significant financial and other burdens,” but refused to remark on the reason why or whether the Federal Communications Commission specified a timeline to rule on the acquisition.
Outside counsel for Level 3 also wrote the Federal Communications Commission, adding that the two companies trust that there aren’t any outstanding barriers “to the prompt grant of the Applicants applications.”