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."