By SubTel Forum

Level 3 Communications Inc. said Monday that it is buying Global Crossing Ltd. for $2 billion, joining two major long-distance telecommunications networks that carry massive amounts of Internet and other data traffic in the U.S. and internationally.  Both Level 3 and Global Crossing operate vast networks of optical fiber used by other telecom carriers, corporations and government agencies. The combined company's reach would extend to 70 countries on three continents.

Despite steadily increasing data traffic, the prices Level 3 and companies like it can charge for carrying that traffic have been driven down by competition, said Erik Kreifeldt, a senior analyst with the research firm TeleGeography. Meanwhile, the carriers have high fixed costs, including the cost to lay fiber-optic cables on the bottom of the ocean.

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