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Groups Slam CenturyLink’s Level 3 Acquisition, Citing Competition Concerns, Fiber Issues

CenturyLink Level 3 logo

**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in November-December 2016.**

Incompas, the industry association formerly known as COMPTEL, is raising concerns about CenturyLink’s proposed purchase of Level 3 Communications, saying it could decrease competition and slow development of innovative fiber infrastructure.

The Federal Communications Commission currently is reviewing the merger, which is anticipated to close on Sept. 30. In comments filed with the FCC, Incompas said that while CenturyLink and Level 3 assert that there is a public interest benefit from the transaction, “these benefits, however, are not so much affirmative public interest benefits as benefits to the applicants themselves.”

“Level 3 is a shining example of how competition and interconnection policy bring more innovation and better customer service to market — it is a competitive provider that both builds and leases wholesale access to benefit the broadband ecosystem,” said Karen Reidy, Incompas’ vice president of regulatory affairs. “While we understand why an incumbent like CenturyLink would desire to acquire such an innovative network, the significant reduction in competitive choice at building locations across CenturyLink’s footprint threatens to saddle business customers with less choice and higher prices, and the transaction threatens to slow down the construction of new fiber infrastructure across the nation.”{ad}

The transaction increases CenturyLink’s network by 200,000 route miles of fiber, which includes 64,000 route miles in 350 metropolitan areas and 33,000 subsea route miles connecting multiple continents.

Dedicated business-service markets in which both CenturyLink and Level 3 compete with the same products and geographies are highly concentrated, and with the merger, CenturyLink will see “further consolidation of its market power, especially in its incumbent region,” Incompas said.

Incompas also said the applicants have failed to offer adequate information on dark fiber, a “potential red flag for the important long-haul transmission market — essential to connecting networks both wired and wireless that are powering business transactions and streaming services.”

Linda Johnson, a CenturyLink spokesperson, said the nation’s telecommunications and IT infrastructure “must continue to evolve quickly to meet the ever-increasing demands of government, business and consumers.

“Because we must meet those needs and strengthen America’s telecommunications infrastructure for the future, it is clear that this transaction is in the public interest,” she said.

Also this week, the National Congress of American Indians filed comments with the FCC saying the merger likely will lessen the incentive to invest in network facilities serving tribal lands and deter competitive entry.

“The merger applicants focus on opportunities in metropolitan areas, international opportunities and with multi-location enterprise customers,” it said. “What is noticeably missing, particularly given the breadth of the 14-state area served by CenturyLink, is a discussion of how the merger may benefit enterprise customers in tribal areas CenturyLink serves and where CenturyLink is the carrier of last resort.”


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