FCC approves CenturyLink, Qwest merger; stipulates list of clauses

22 Mar 2011

US telecoms regulator the Federal Communications Commission (FCC) has granted approval to the long-running USD10.6 billion merger that will see fixed line operator CenturyLink purchase rival telco Qwest Communications. The FCC’s decision clears the way for the companies to close the merger on 1 April 2011. The transaction, which was first announced in April 2010, has already won approval by 20 states and the District of Columbia. Shareholders from both companies have also approved the deal. In July 2010 the Department of Justice and the Federal Trade Commission cleared the transaction, after determining there were no antitrust concerns.

A statement issued by the FCC reads: ‘In doing so, the Commission imposed protections against the risk of harm to competition and ensured the merged entity will live up to its commitments to significantly expand its network and launch a major broadband adoption programme for low-income consumers. Based on the companies’ agreement to certain conditions, the FCC found that the potential public interest benefits of the merger are likely to outweigh the potential harms’. Among the clauses stipulated by the FCC, the companies must offer qualifying low-income households broadband connections starting at less than USD10 per month and computers for less than USD150, keeping the sign-up window open for five years. Further, Qwest must significantly increase the capacity of its network, offering download speeds of at least 4Mbps to four million additional homes and businesses, and at least 20,000 anchor institutions, such as schools, libraries, and community centres. The number of homes with access to transmission speeds of 12Mbps must double, whilst subscribers with access to speeds of 40Mbps must triple.

Glen F. Post, III, CEO and president of CenturyLink, commented: ‘We are pleased to receive the commission’s approval and appreciate their hard work during the review of our proposed transaction. The merger of CenturyLink and Qwest will bring greater broadband availability to customers and serves the public interest by allowing us to offer a wider variety of services than either company could offer alone’.

United States, Lumen Technologies (incl. CenturyLink), Qwest Communications International