The merger of Global Crossing and Level 3 Communications will create a “global colossus" in the Internet backbone market, XO Communications asserted this week in a filing with the Federal Communications Commission.
XO is asking the FCC to find that the transaction is not in the public interest.
“By bringing together the two leading Internet backbone providers (“IBPs"), the transaction will create a ‘global colossus’ that will dominate the market, leading to significantly higher prices and decreased service quality and innovation for other IBPs and their customers," XO declared in the filing.
Meanwhile, the U.S. Department of Justice has asked Global Crossing and Level 3 for more information in connection with their pending merger, Global Crossing announced Tuesday. The Justice Department has made a “second request" under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, according to Global Crossing.
The agency, including the Federal Bureau of Investigation with the concurrence of the Department of Homeland Security, also has asked the Federal Communications Commission to defer action on the merger.
“DOJ, DHS, and FBI … are currently reviewing this matter for any national security, law enforcement, and public safety issues but have not yet completed that effort," the Justice Department noted in a filing on Monday. “We therefore request that the Commission defer action until such time as the Agencies notify the Commission of the completion of their review and, based on the results of such review, request appropriate action by the Commission."
In April, Level 3 announced an agreement to acquire Global Crossing in a $3 billion deal 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 the communications provider to better serve enterprises, content providers, carriers and governments throughout North America, Latin America and Europe. The merger would create a communications company with pro forma combined 2010 revenues of $6.26 billion.
The companies previously revealed they expected the merger to close before the end of the year following customary closing conditions and regulatory approvals, and Global Crossing said Tuesday it didn’t expect the previously announced schedule to change.