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Level 3 Global Crossing Merger Not in Public Interest

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Level 3 Global Crossing Merger Not in Public Interest

  1. 1. XO Communications Statement: Level 3 & Global Crossing Merger Not in Public Interest Combined Company Would Dominate the “Internet Backbone” Essential for IP TransitHERNDON, VA - July 11, 2011 - Today XO Communications Senior Vice President of External Affairs andAccess Management, Heather Burnett Gold, released the following statement regarding XOs FederalCommunications Commission (FCC) filing concerning the proposed merger of Level 3 Communicationsand Global Crossing Limited."If Level 3 and Global Crossing are permitted to merge, the new company would dominate the Internetbackbone market and control the flow of the worlds Internet traffic, leading to higher prices, lessinnovation, and a slower Internet." Gold said. "The threat to the free and open Internet from this dealshould be obvious on its face."Level 3 and Global Crossing are "Tier 1" Internet Backbone Providers, entities that can reach alladdresses on the Internet either directly via customers or via direct connection with other Tier 1backbone providers. They are essential to the operation of the Internet because regional, national andinternational IP traffic flows through the Tier 1 backbone.Currently, Level 3 is the world market share leader and Global Crossing is #2; together, the combinedcompany would dominate the market with an estimated 55% share of customers, three times the size ofthe next largest Tier 1 provider.If the federal government approves this merger, the dominant new company, Level Crossing, would beanything but "level" as it imposes its will on other players in the Internet. This new global juggernautwould have the market power to charge significantly higher prices to ISPs, content providers, contentdelivery networks (CDNs) and end users - including small business owners and consumers. Add to thatthe exclusive, high value content they control, and Level Crossing is poised to raise the price of theInternet for everyone."The FCC and the Justice Department know that without competition, prices rise and innovation andservice quality declines," Gold said. "For the sake of broadband affordability and the continuedopenness of the Internet, this merger should be rejected."