Representatives of Level 3 Communications and Global Crossing have asked Federal Communications Commission officials to approve their merger because there is nothing left for the agency to investigate.
In a meeting with FCC officials on Aug. 10, the companies stressed that there were no issues presented by the record that warranted further investigation by the FCC,” according to a letter filed with the agency.
Level 3 and Global Crossing are calling for the FCC to approve the merger after Level 3 reached an agreement with XO Communications that resolved concerns XO previously raised in connection with Level 3s acquisition of Global Crossing.
Level 3 and Global Crossing representatives most recently met with FCC officials on Tuesday.
“Applicants believe that there are no remaining impediments to the prompt grant of the Applicants applications,” Level 3’s outside counsel wrote in a letter filed Thursday with the FCC.
XO previously objected to the $3 billion deal on the grounds that the merger was not in the public interest and would create a global colossus” in the Internet backbone market, resulting in higher prices and decreased service quality. In a declaration filed with the FCC earlier this year, XOs chief technology officer, Randolph Nicklas, asserted the merger would give Level 3 an incentive to cease Internet peering arrangements with other Tier 1 network providers and instead demand payment to exchange traffic.
But Level 3 noted in an Aug. 12 letter filed with the FCC that it was willing to adjust its agreement with XO because it believes that XO now meets, and is willing to embrace, the framework of Level 3s developing peering policy.”
XO now believes the merger is in the public interest, according to a separate letter filed with the FCC earlier this month.
Thomas Cohen, XOs outside counsel with Kelley Drye & Warren LLP, declined to elaborate further on the agreement, referring questions to XO Vice President of Federal Affairs Lisa Youngers. Youngers did not immediately respond to an emailed request for comment sent late Thursday.
Earlier this month, Level 3 and Global Crossing representatives informed FCC officials that delay in obtaining approvals for the transaction would result in significant financial and other burdens” for the companies.
A Level 3 spokesman declined to comment on why the companies would suffer such burdens. He also declined to comment on whether the FCC has indicated a timeline for ruling on the merger.
The agency is in day 70 of its unofficial 180-day timeline for reviewing the transaction.
XO was not the only telecommunications provider to object to the merger. Pac-West Telecomm also has raised specific concerns. Generally speaking, Pac-West has alleged Level 3 doesnt pay it for services it provides in connection with a toll-free call. But Level 3 and Global Crossing maintain the FCC is addressing the issue in a separate proceeding and shouldnt tackle the matter in the merger review.
In April, Level 3 announced an agreement to acquire Global Crossing in a merger that would create a company with ownership over networks in more than 50 countries and connections to more than 70 countries. Level 3 said the buy would allow it to better serve enterprises, content providers, carriers and governments throughout North America, Latin America and Europe.
In the second quarter, Level 3 reported consolidated revenue of $932 million and a net loss of $181 million, or $0.11 per share. Global Crossing posted consolidated revenues of $692 million and a consolidated net loss applicable to common shareholders of $35 million.
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October 23 2018 @ 17:53:03 UTC