360networks Fiber Optic Network

360networks is in the process of constructing a North American fiber optic network, as well as a similar network in Europe and a link under the Atlantic Ocean. For the purposes of its continental network, 360networks negotiated the use of certain rights of way belonging to Canadian National Railway Company (CN) and its wholly-owned US subsidiary, Illinois Central Railroad Company (IC). The transaction involved the creation of a series of joint venture companies (collectively “Newco”) owned by 360networks (75 per cent) and CN (25 per cent) and the grant of a license, by CN to Newco, to construct, lease, sell and/or operate a fiber optic telecommunications network along CN’s right of way across Canada and IC’s right of way from Chicago to the Gulf of Mexico.

The fiber optic network constructed along the CN and IC rights of way is to form part of 360networks’ North American fiber optic telecommunications network. Following the licensing transaction, CN exchanged its 25 per cent interest in Newco for a portion of the equity of 360networks.

The value of the transaction to CN will vary depending on the valuation of 360networks for the purposes of the IPO. According to 360networks’ preliminary prospectus, the estimated cost of constructing 360networks’ fiber optic network is approximately US$1.6 billion.

McCarthy Tétrault is acting for CN along with Michel Martineau of CN’s in-house counsel, with a team of lawyers including Benjamin Silver and Ilan Dunsky of McCarthy Tétrault’s Montreal office. 360networks is being represented by Catherine McEachern of 360networks’ in-house counsel, who has called on Bruce Tattrie of Campney & Murphy in Vancouver, Cameron Belsher of Farris Vaughan Wills & Murphy in Vancouver and Roger Andrus of Cahill Gordon & Reindel in New York to provide external counsel. Counsel to IC is Michael O’Shaughnessy and Jordan Peters of Freeborn & Peters, Chicago.

Lawyer(s)

Benjamin Silver Cameron Belsher Ilan Dunsky Michael L. O'Shaughnessy Bruce Tattrie Jordan H. Peters Roger Andrus

Firm(s)

McCarthy Tétrault LLP FARRIS Freeborn & Peters Cahill Gordon & Reindel LLP