Thursday, March 17, 2011

FCC Approves CenturyLink+Qwest Deal with Conditions

The FCC approved the pending merger of CenturyLink and Qwest Communications, with the following binding and enforceable conditions:

Broadband adoption program for low-income consumers

  • Launch major broadband adoption program focused on connecting the millions of
    low-income consumers in the combined company's 37-state territory.
  • Offer qualifying households broadband starting at less than $10 per month and a
    computer for less than $150, and keep the window open for five years for
    qualifying consumers to sign up.
  • Make a significant annual commitment to marketing, outreach, and digital literacy
    training, and include detailed reporting on outcomes and an independent analysis
    of the program's effectiveness.

Broadband deployment
  • Significantly increase the capacity of the Qwest network, bringing broadband
    with actual download speeds of at least 4 Megabits per second (Mbps) to at least 4
    million more homes and businesses, and at least 20,000 more anchor institutions,
    such as schools, libraries, and community centers.

  • Significantly increase availability of higher-speed broadband: The company will
    more than double the number of homes and businesses that can get 12 Mbps
    broadband, and more than triple the number that can get 40 Mbps broadband.

Advancing Universal Service Fund reform
  • Phase down three forms of support designed for smaller companies, which the
    company currently receives from the federal Universal Service Fund.

Protection against potential transaction-related harms
  • No increase in enterprise service prices for 7 years in a few dozen buildings where
    the companies currently compete (Minneapolis, Minn., and Olympia, Wash.).

  • Safeguards for smooth transition of operations support systems, to protect
    wholesale customers.

  • Ensuring the merger does not harm interconnection agreements with competing
    phone carriers.

  • Maintenance of wholesale service quality.

CenturyLink offers voice, video, and data services in 33 states, serving
approximately 7 million access lines and 2.2 million broadband customers in its region.
CenturyLink also operates as a competitive local exchange carrier in certain local and regional

Qwest operates as a local exchange carrier serving 10.3 million lines in a 14-state region; has 3 million broadband customers; and sells wireless, video, and extensive wholesale services through its subsidiaries. Under the deal, Qwest will operate as a wholly owned subsidiary of CenturyLink.

The companies expect to close the merger and combine operations on April 1, 2011, subject to receipt of the remaining necessary regulatory approval. As previously announced, the combined company will use the name CenturyLink and its stock will continue to trade on the New York Stock Exchange under CenturyLink's current symbol, CTL. Qwest shares outstanding at the end of the business day immediately prior to the close date will convert to CenturyLink shares on the close date at an exchange rate of 0.1664 share of CenturyLink for each share of Qwest.http://www.fcc.gov