FCC's Approval for VSNL to Acquire TGN

The US Federal Communications Commission (FCC) has approved the application of India's Videsh Sanchar Nigam Limited (VSNL) to transfer the Tyco Global Network (TGN) landing station licences.

VSNL is India's leading provider of international telecommunications and Internet services. It had announced in November 2004 that it had agreed to acquire TGN, the world's most advanced submarine cable system, for $130 million.

The approval comes in the wake of some strong objections from at least three Republican Senators and one US company which separately cited homeland security concerns in letting a "demonstrably hostile" entity take over a strategic American asset.

The FCC's approval concludes a nearly six-month process that included a formal review by the Committee on Foreign Investment in the United States (CFIUS), the Department of Homeland Security (DHS), the Department of Defence (DOD), the Department of Justice (DOJ), the Federal Bureau of Investigation (FBI) and other agencies to ensure the transaction would not pose competition, law enforcement, national security or public safety concerns.

"By obtaining approval from the FCC for this transaction, VSNL has crossed a significant milestone in its drive to acquire TGN," N. Srinath, director of operations, VSNL, was quoted as saying in a press release.

"This acquisition is a major component of our strategy to offer enterprise and carrier customers seamless, end-to-end telecommunications solutions that circle the globe.

"This network, coupled with our expansive network within India and into Asia, will provide our customers unprecedented choice with regard to global data services. It will also give customers the ability to receive service under one brand with one single point of contact."

Crest Communications Corp, a US corporation, had filed a petition with the FCC asking it to reject Tyco Communications' applications to sell its global fibre network to VSNL on the ground of homeland security concerns.

In its Petition to Deny before the FCC, Crest Communications Corp's vice president Brian Roussell had said: "This sale of the last remaining global undersea cable network under US ownership and control represents a direct threat to our nation's security."

"By approving this sale, the FCC would be giving up US control of this vital international communications artery, which accounts for over 85 percent of the total trans-Pacific submarine cable capacity. We would lose our ability to ensure safe, reliable and secure telecommunications services that are essential to the US military in a time of crisis," he contented.

Republican Senators Jon Kyl of Arizona, Ted Stevens of Alaska and Jeff Sessions of Alabama had written to Energy Secretary John Snow opposing the proposed the takeover. They had called for a full investigation by the Committee on Foreign investment in the US.

"TGN is a strategic asset of incalculable value to the United States security and commercial interest. It is an immense, international network offering massive amounts of high-quality fibre optic bandwidth," the senators wrote.

"This transaction gives the Indian government control over a significant portion of the world's submarine cable network (including more than 80 percent of the total trans-Pacific undersea capacity) and over key strategic submarine cable landing stations in the US," they wrote.

It was not immediately clear whether the FCC approval meant the take-over would not run into any more obstacles.