Level 3 argues to FCC that Global Crossing deal will create a stronger competitor

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Level 3 Communications (Nasdaq: LVLT) has petitioned to the FCC that its pending acquisition of Global Crossing (Nasdaq: GLBC) won't cause any other carriers to raise competition or public interest issues.

In an application sent to the FCC last month seeking approval for its $3 billion acquisition of Global Crossing, Level 3 argued that there's no need to scrutinize the deal or place any conditions on it to be approved.

Upon completion, the newly combined company would create an even larger one service provider with network presence in 50 countries and connections to more than 70 countries.

Now the FCC has to determine whether the deal will serve the public interest, convenience and necessity.

Both service providers argue in the filing that the deal will serve the public interest "by offering customers an expanded suite of services--globally-delivered transport, Internet protocol-based ... data, content delivery, data center, collocation, and voice services--and more extensive geographic reach in North America, Latin America, Europe, and Asia with a combination of intercity and metro networks and undersea cable facilities."

For Level 3, the value in buying Global Crossing is in bolstering its enterprise offerings to more effectively compete with AT&T (NYSE: T), BT (NYSE: BT), Verizon (NYSE: VZ) and Orange Business Services that have large global service and network footprints serving multisite, multinational businesses.

While Level 3 has a number of enterprise offerings in its arsenal that it already sells directly to enterprises, Global Crossing will provide it with an enhanced set of collocation, CDN, and global IP/VPN services. Level 3 that it can sell those services to multisite enterprises that have presence in many of Level 3's on-net, fiber-fed buildings.  

In addition to gaining a larger set of enterprise services, the deal will immediately give Level 3 a foothold in the burgeoning Latin American telecom market that Global Crossing already serves with a well-established set of not only wholesale carrier services, but also IP data, colocation and CDN services.

For more:
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