Wednesday, June 24, 2009

FCC Approves CenturyTel and EMBARQ Merger

The FCC approved CenturyTel's pending acquisition of EMBARQ. The merger is expected to be finalized on July 1, 2009.

In its approval, the FCC concluded that the proposed transaction is unlikely to harm competition or potential competition in those local
markets where the two companies currently compete. The FCC also stated that it not concerned that the merger will have significant anticompetitive effects in the three local markets where CenturyTel currently competes with Embarq for enterprise customers.

To gain approval, the companies have made a number of voluntary commitments to the FCC, including a pledge to "integrate, and adopt for CenturyTel CLEC orders, the automated [OSS] of Embarq within fifteen months of the transaction's close," and in the interim, to "devote additional resources to its existing manual CLEC order processing system to ensure that all local number portability requests are
promptly processed." Applicants also commit to processing CenturyTel's wholesale LNP orders through Embarq's OSS.

Furthermore, CenturyTel and EMBARQ specifically committed to substantially increase the broadband service available to consumers in the areas they serve over the next three years. The companies pledged to offer retail broadband Internet access to 100 percent of the merged company's retail single-line residential and single-line business access lines within three years of the transaction closing date. To meet this commitment, the merged company has committed to make available retail broadband Internet access service with a download speed of 768 kbps to 90 percent of such lines within three years using wireline technologies.128 The merged company will make available retail broadband Internet access service in accordance with the Commission's current definition of broadband to the remaining 10 percent of lines using alternative technologies and operating arrangements, including but not limited to satellite and terrestrial wireless broadband technologies.

"We have committed to the FCC that we will remain focused on infrastructure development and broadband deployment after completion of the merger," said Tom Gerke, EMBARQ's chief executive officer. "Our combined company is committed to investing in our communities and providing our customers high-quality, reliable communications and expanded broadband services."

The FCC memorandum and order approving the merger can be found on the FCC website.

  • The new company formed by the merger of CenturyTel and EMBARQ will be known as CenturyLink. Full deployment of the brand is expected to occur in the months following closing. As markets are converted to the new brand, customers will receive advance notification and CenturyLink will begin to appear on building signage, company vehicles and marketing materials.

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