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FCC Approves Qwest-CenturyLink Merger

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WASHINGTON, March 21, 2011 -The Federal Communications Commission approved the merger of telecommunications carrier, Qwest Communications, and internet service provider, CenturyLink.

Following the completion of the merger, Qwest will become a subsidiary of CenturyLink.

The companies must now wait for approval from the state of Oregon before they can formally merge. Washington, Minnesota and Arizona have already approved the action.

The Commission imposed broadband deployment requirements to the merger which mimic those they applied to the NBCU-Comcast merger. CenturyLink must launch a broadband adoption program targeted toward low-income customers in 37 states. Customers participating in the program will be able to obtain broadband internet service for about $10 per month. Additionally the company will develop digital literacy training programs.

“We are told that this combination will help expand the benefits of broadband to consumers and communities across the country—that the new CenturyLink will be a stronger company with greater resources to invest in its now significantly expanded service territory," said FCC Commissioner Michael Copps in his concurring statement. "On this score, I believe the applicants’ commitments on broadband deployment are a step in the right direction.“

In his statement of support, FCC Chairman Julius Genachowski said, “The conditions we’ve imposed should effectively protect against the identified transaction-specific harms, and the company’s commitments to help connect so many more Americans to broadband is an important and substantial public-interest benefit.”

Among the major merger conditions, the Quest network must expand its 4 megabit per second (Mbps) network to 4 million new homes and at least 20,000 anchor institutions. To expand higher speed access, the company will have to double the number of homes that can receive a 12 Mbps connection, and triple the number that can receive a 40 Mbps connection.

In her statement, Commissioner Mignon Clyburn offered some concern about the deal.

“The companies asserted that post-merger CenturyLink will continue to focus on rural customers, yet the company did not provide sufficient information in the proceeding so that we could ensure that result," said Clyburn in her statement. "While the companies pledge to inform us in their regular reporting the broadband deployment that occurs in rural versus non-rural areas, I would have preferred a specific, verifiable commitment to deploy broadband in unserved, rural areas.”

While Commissioner Meredith Attwell Baker approved of the merger, she found fault with the FCC for taking too long in approving the merger, pointing out that the Department of Justice, which works in tandem with the FCC on such mergers, approved the transaction nine months ago. Baker has been an outspoken critic of the length of time the FCC takes to review mergers and the conditions it frequently imposes on them.

The full order can be found here.

Rahul Gaitonde has been writing for since the fall of 2009, and in May of 2010 he became Deputy Editor. He was a fellow at George Mason University’s Long Term Governance Project, a researcher at the International Center for Applied Studies in Information Technology and worked at the National Telecommunications and Information Administration. He holds a Masters of Public Policy from George Mason University, where his research focused on the economic and social benefits of broadband expansion. He has written extensively about Universal Service Fund reform, the Broadband Technology Opportunities Program and the Broadband Data Improvement Act

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