STT [Foreign Government Owned Company] Sees Global Crossing [Telecommunications] Deal Closed Soon

WASHINGTON (Reuters) - Singapore Technologies Telemedia said on Friday it hopes to take control of bankrupt Global Crossing Ltd. in weeks now that U.S. law enforcement authorities have sent a network security pact to communications regulators.

The two companies signed the 31-page network security agreement full of safeguards -- like ensuring law enforcement agencies can carry out criminal investigations -- to satisfy security concerns because STT is owned by an arm of the Singapore government.

The Federal Communications Commission (news - web sites) must still approve STT's $250 million purchase of the 61.5 percent stake in Global Crossing. (Other OTC:GBLXQ - news) The bankrupt company operates a global fiber optic high-speed telecommunications network.

"We look forward to completing the FCC (news - web sites) review and to closing the transaction in the coming weeks," said STT spokesman William Maroni. The security pact was worked out with the U.S. Departments of Defense, Justice and Homeland Security.

Previously, the Pentagon (news - web sites) and the Department of Homeland Security had expressed concerns about allowing a company owned by an arm of the Singapore government to acquire a U.S. company that operates critical infrastructure.

But, President Bush (news - web sites) approved the transaction after the companies agreed to the security pact.

"This agreement reflects the unwavering commitment of ST Telemedia and the new Global Crossing to U.S. national security and the security of the Global Crossing network," Maroni said.

It lays out the parameters for guaranteeing U.S. law enforcement agencies access to Global Crossing's network in the United States for investigations and limits foreigners access to those assets.

The agreement also prevents Global Crossing's U.S. unit from routing domestic traffic outside the country and requires foreign visitors to the company's U.S. operations to be cleared in advance by a security officer.

The pact also establishes that half of Global Crossing's board will be made up of security directors who are U.S. citizens and have U.S. security clearance. U.S. agencies will have the ability to block a selection of a security director.

Most board meeting will require the presence of one of the security directors, according to the pact. The companies have already said one of those board members would be the Pentagon's former weapons buyer, Edward "Pete" Aldridge.

Originally, Hong Kong-based Hutchison Whampoa Ltd. (0013.HK) was going to buy half of the majority stake but withdrew after U.S. officials raised national security concerns about that company's ties to China.

Global Crossing filed for bankruptcy protection 20 months ago after amassing $12.4 billion in debt amid sagging demand.

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First time in history a foreign government has owned a controlling majority interest in so much of the US telecommunications infrastructure. And this post-bankruptcy Global Crossing won't have the debt burden that their competitors AT&T, Sprint, and MCI have; with the Singapore Government's deep pockets, they'll soon own them too.

I'm one of GWB's biggest fans, but he may have gotten some bad advice on this one. I'm not sure giving US telecommunications over to foreign government ownership is a good idea, 31 pages of agreements or not.

Sure Singapore is an ally, but so is France, despite recent unpleasantness over Iraq and policy disagreements going back for years. Would we let France Telecom have 60+% of one of our major facilities-based carriers? Seems like we'd have to now.

China to help Europe develop GPS rival

14:55 19 September 03

NewScientist.com news service

China is to contribute to a new global satellite navigation system being developed by European nations.

The Galileo satellite system will offer a more accurate civilian alternative to the Global Positioning System (GPS), operated by the US military. China will provide 230m Euros ($259m) in funding and will cooperate with technical, manufacturing and market development.

"China will help Galileo to become the major world infrastructure for the growing market for location services," said Loyola de Palacio, EU transport commissioner.

A new centre that will coordinate co-operation was also announced by the European Commission, the European Space Agency (ESA) and the Chinese Ministry of Science and Technology on Friday. The China-Europe Global Navigation Satellite System Technical Training and Cooperation Center will be located at Beijing University. China has a substantial satellite launch industry and could potentially help launch the Galileo satellites.

One-metre precision

But the project had already drawn heavy criticism from the US Department of Defense, and the involvement of China is unlikely to improve the situation. Some commentators say future Chinese weapons could incorporate the Galileo system.

The US has claimed that Galileo could interfere with the US ability to downgrade the GPS service during military conflicts. European officials say this is unfounded and counter that US opposition is due to the commercial challenge Galileo would present to GPS. Galileo will be precise to within a metre, while the civilian GPS service is accurate to around 10 metres.

The Galileo satellite constellation will consist of 27 operational and three reserve satellites orbiting the Earth at an altitude of 23,600 km. The satellites will be strung along three medium-Earth orbits at 56 degrees inclination to the equator and will provide global coverage. The system should be operational by 2008 and the entire project is expected to cost around 3.2 billion Euros ($3.6 billion).

Wide-band signal

The European Commission has said Galileo will primarily be used for transportation technology, scientific research, land management and disaster monitoring.

Galileo will provide two signals; a standard civilian one and an encrypted, wide-band signal called the Public Regulated Service (PRS). This second signal is designed to withstand localised jamming and will be used by police and military services in Europe. European Commission officials have said China will not be given access to the PRS.

The first Galileo satellite is scheduled to launch late in 2004. Clocks on board the satellites will be synchronised through 20 ground sensors stations, two command centres and 15 uplink stations.

Receivers on the ground will use time signals from the satellites to precisely calculate their location. A "search and rescue" function will also let distress signals be relayed through the constellation of satellites.

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