FCC Approves Qwest/CenturyLink Merger

Companies combine voice, video, and data services with 3 million broadband customers

The FCC has approved the
merger of broadband providers CenturyLink and Qwest, subject to various
conditions including major broadband adoption and deployment programs.

Among the promises are
low-cost broadband for low-income homes, digital literacy and training, boosting
network capacity to actual - rather than advertised - speeds of 4 mbps to at
least 4 million homes and 20,000 anchor institutions. The company also agreed
to forego some Universal Service funds designed for smaller companies.

The deal
combines CenturyLink's voice, video, and data services in 33 states (it
has 2.2 million broadband customers) with Qwest's 3 million
broadband customers to 14 states. Qwest also sells wholesale video
and wireless service via subsidiaries.

The two have agreed
to hold the line on prices for seven years in a handful of buildings (a few
dozen) where they compete for enterprise business service. They also promised
the deal would not affect interconnection deals with competing carriers or
wholesale service quality.

All five commissioners voted to approve the merger, though
only Chairman Julius Genachowski and  Commissioner Mignon Clyburn
voting, with Commissioners Michael Copps, Robert McDowell and Meredith Attwell
Baker concurring, which is short of full-throated approval.

Even Clyburn had issues, saying in her statement that she wished
there had been a condition on rural rollouts.

"While the companies pledge to inform us in their regular
reporting the broadband deployment that occurs in rural versus non-rural
areas," she said, "I would have preferred a specific, verifiable
commitment to deploy broadband in unserved, rural areas."

Free Press did not oppose the merger, but that didn't stop it from upbraiding the FCC for not imposing network neutrality conditions on the deal, as it did on Comcast/NBCU and as Free Press had wanted on this deal.

"[W]e did raise concerns about its impact on the companies' customers and requested the FCC apply conditions similar to the Net Neutrality protections applied in the AT&T-Bell South merger to safeguard the open Internet and lessen the harm to consumers," said Free Press Research Director Derek Turner. "Instead of following precedent and ensuring this merger could benefit the public, Chairman Genachowski was unwilling to place any conditions on these companies beyond what they agreed to do voluntarily."