Global Crossing eyes federal prize

* Global Crossing wants federal business

Global Crossing, an all-IP carrier whose largest customer is the U.K. government, is making a major push into the U.S. federal market.

Global Crossing is planning to bid on Networx, a 10-year, $20 billion deal to provide telecommunications services to all U.S. federal agencies. Networx includes a wide array of legacy and leading-edge voice, data and video services. It is believed to be the largest pending telecom deal in the world today.

The company is also is looking to beef up its business with the U.S. Department of Defense, the State Department and other internationally oriented agencies that can take advantage of its far-flung network footprint and advanced services.

"With our restructuring behind us, we're starting to make a foray into the U.S. government market," says Ed Bursk, vice president, government, for Global Crossing. "We do an unbelievable amount of work for the U.K. government. We're on a great vector with a strong backer and millions in the bank. We'll generate our own cash in 2006."

Global Crossing tried to penetrate the federal market at the turn of the new millennium, but it had to put this effort on hold after the global telecommunications market collapsed.

In 2001, Global Crossing won a 10-year, $400 million contract for the Defense Research and Engineering Network (DREN), which is one of the world's highest performing production networks. After other bidders protested, Global Crossing lost the DREN contract because of its precarious financial position. Ironically, the DREN deal was awarded to WorldCom (now MCI), whose own financial problems weren't evident at the time. After the DREN deal fell through, Global Crossing disbanded its federal sales effort.

Global Crossing filed for Chapter 11 bankruptcy protection in 2002 and emerged in mid-2003 with a restructured business and a new owner, Singapore Technologies Telemedia. The ISP's focus is to sell to corporate and government customers as well as to maintain its wholesale business with other carriers.

The company is re-entering the U.S. federal market with a dedicated business development team in Northern Virginia and plans to bid either directly or as a subcontractor on several major government deals.

Global Crossing's advantage in the federal market is that it owns a new all-IP network with Multi-protocol Label Switching (MPLS) at its core. This advanced network supports many emerging services including 10G Ethernet, VoIP, Web conferencing and IPv6, the next generation of the Internet's main protocol.

The carrier's network is bigger than many of its competitors. It spans 300 cities in 30 countries in North America, Latin America, Europe and Asia. Through partnerships, Global Crossing reaches 500 cities in 50 countries.

"We're a new network in the telecom space. It was five to seven years ago when we started to build this out in a big way," Bursk says. "We essentially have a very modern and unified infrastructure [that's] well architected. We have [Dense Wavelength Division Multiplexing] and MPLS at the core. We actually do MPLS over the backbone. So our IP VPN services run directly over MPLS and that runs directly over wavelengths. It cooks."

Global Crossing also touts a special security agreement that it signed with the federal government as a condition of having its network assets being purchased by a foreign entity. As part of that agreement, Global Crossing committed to strict security policies and added to its board of directors security experts including E.C. "Pete" Aldrich, former undersecretary of Defense, and Adm. Archie Clemins, the former commander-in-chief of the Pacific Fleet.

Global Crossing has had some success to date. The ISP won a subcontract from Northrop Grumman to provide a high performance network for the Air Force's Distributed Mission Training program. It's also on multiple teams for the Department of Justice's massive Integrated Wireless Network program, which will support 80,000 federal law enforcement agents.

Bursk says Global Crossing will add its services to the General Services Administration's multiple award schedule contract, a pre-approved list of vendors that federal agencies can tap for smaller purchases. The GSA schedule contract should be announced "soon," Bursk says.

This summer will be a busy one for Global Crossing's federal team as it puts together bids for Networx, which is divided into two parts: Universal and Enterprise. Networx Universal covers 37 domestic and international telecom services ranging from older frame-relay and asynchronous transfer mode to cutting-edge VPNs and VoIP. Networx Enterprise, which is geared toward smaller carriers, includes a core set of IP and wireless services in particular geographic regions.

Global Crossing is a likely bidder on Networx Enterprise and subcontractor on Networx Universal.

"Our strategy is not to divulge our entire strategy," Bursk says. "Enterprise is a very obvious play for us to make, but on the Universal side, it's not beyond the realm of possibility for us to bid. We would certainly need to construct our team carefully."

For a decade, Global Crossing has held a similar telecommunications services contract with the U.K. government. Last year, the ISP won a two-year contract extension for the U.K. Managed Telecommunications Services (MTS) program worth an estimated $80 million.  The MTS contract involves providing voice and data services to 110,000 users in 90 U.K. government departments.

"We still have to prove ourselves in the U.S. federal market, but we actually come to that market with government experience," Bursk says.

Indeed, Global Crossing says that this time it is committed to the U.S. federal market for the duration.

"We are definitely in this for the long haul," Bursk says. "We hope to have substantial federal business in the coming five years."

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