CenturyLink and Level 3 Communications have been asked by the FCC to respond to a request for further information on the impact of the companies’ proposed $34 billion merger on the business Internet access, business data service (BDS), and various fiber services.
Announced last October, the proposed union of CenturyLink and Level 3 would position the merged entity as the secondlargest provider of business communications services in the U.S. behind market leader AT&T. Earlier this week, CenturyLink confirmed that the Level 3 transaction had been approved by regulators in three additional states to bring the total number of state clearances thus far to eleven states plus the District of Columbia. The FCC stated that its purpose was to seek “clarification of certain matters” discussed by the parties in their application for consent to transfer of control, which would enable the agency to “make the necessary public interest findings.”
Specifically, the FCC’s letter focuses on BDS, business Internet access, lit fiber, dark fiber, long haul fiber and metro fiber services provided by the companies. With respect to these services, the letter asks CenturyLink and Level 3 to describe and document the extent to which they compete with each other in the provision of each service, and the extent to which the proposed merger will affect their plans and offerings for each service. Level 3 was also asked to describe and document the extent, if any, to which it has altered its pricing strategies for the aforementioned services since January 2016. Finally, both companies have been asked to explain what steps they will take to achieve cost savings, synergies and other benefits to accrue from the merger and what plans they have to pass any cost savings on to their customers.
Officials of both companies said Wednesday that they expect to receive all remaining state, federal, and international approvals in time to complete the transaction by September 30. Emphasizing that the merger “will bring substantial service benefits to our customers, employees and communities,” CenturyLink senior vice president John Jones asserted that the combined company “will have a stronger and larger network that will help drive economic growth.”