Level 3 Global Crossing Merger Not in Public Interest
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XO Communications opposes the proposed merger between Level 3 Communications and Global Crossing, arguing it would dominate the internet backbone market with a 55% share and harm competition. The new company, Level Crossing, would control internet traffic flows and have power to raise prices for ISPs, content providers, and end users, threatening the open internet. XO believes the merger should be rejected by regulators to maintain competition and broadband affordability.
Level 3 Global Crossing Merger Not in Public Interest
- 1. XO Communications Statement: Level 3 & Global Crossing Merger Not in Public Interest Combined Company Would Dominate the “Internet Backbone” Essential for IP Transit HERNDON, VA - July 11, 2011 - Today XO Communications Senior Vice President of External Affairs and Access Management, Heather Burnett Gold, released the following statement regarding XO's Federal Communications Commission (FCC) filing concerning the proposed merger of Level 3 Communications and Global Crossing Limited. "If Level 3 and Global Crossing are permitted to merge, the new company would dominate the Internet backbone market and control the flow of the world's Internet traffic, leading to higher prices, less innovation, and a slower Internet." Gold said. "The threat to the 'free and open Internet' from this deal should be obvious on its face." Level 3 and Global Crossing are "Tier 1" Internet Backbone Providers, entities that can reach all addresses on the Internet either directly via customers or via direct connection with other Tier 1 backbone providers. They are essential to the operation of the Internet because regional, national and international IP traffic flows through the Tier 1 backbone. Currently, Level 3 is the world market share leader and Global Crossing is #2; together, the combined company would dominate the market with an estimated 55% share of customers, three times the size of the next largest Tier 1 provider. If the federal government approves this merger, the dominant new company, Level Crossing, would be anything but "level" as it imposes its will on other players in the Internet. This new global juggernaut would have the market power to charge significantly higher prices to ISPs, content providers, content delivery networks (CDNs) and end users - including small business owners and consumers. Add to that the exclusive, high value content they control, and Level Crossing is poised to raise the price of the Internet for everyone. "The FCC and the Justice Department know that without competition, prices rise and innovation and service quality declines," Gold said. "For the sake of broadband affordability and the continued openness of the Internet, this merger should be rejected."