WASHINGTON D.C.-Global Crossing has received Federal Communications Commission approval to transfer its assets and operations to New GX, a company formed under the laws of Bermuda, with main offices in New Jersey, to carry out Global Crossing’s Chapter 11 reorganization process.
The FCC has also approved Singapore Technologies Telemedia Pte. Ltd. to obtain 61.5 percent of the company’s equity and voting interests in common and preferred stock. Certain Global Crossing creditors will receive the other 38.5 percent of New GX common stock.
Many were critical of whether the ST Telemedia transaction would receive FCC approval because the government of Singapore controls the company. In its Order, the FCC concluded that no anti-competitive effects would result from the transaction because ST Telemedia and its subsidiaries do not provide services in the United States. In addition, the Department of Justice, Federal Bureau of Investigation, Department of Defense and Department of Homeland Security advised the FCC they had no objection to the license transfer so long as it was in compliance with the previously negotiated Network Security Agreement, which set forth requirements for network security and protection of critical infrastructure. The FCC further said an additional 25 percent of New GX can be acquired by a foreign investor without additional FCC review.
FCC Commissioner Michael Copps disagreed with the Order. “Approval of this transaction flies in the face of the historic transition to privatization that has done so much to transform global business in recent years,” he wrote.
