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Level 3 Communications Acquisition

The Federal Communications Commission has given the final approval of CenturyLink’s acquisition of Level 3 Communications. This has moved the deal a step forward to finalize the acquisition. CenturyLink® offers one of the best internet services in the country and this approval from the FCC will help it secure this $24 billion deal.

John F. Jones, CenturyLink® Senior Vice President for Public Policy and Government Relations said, “The FCC’s approval of CenturyLink’s acquisition of Level 3 is great news and means we now have all the regulatory approvals we need to close the transaction. We anticipate closing the transaction effective Nov. 1, 2017.”

Recently, the Justice Department prompted CenturyLink® to deprive Level 3 networks operating in Tucson, Albuquerque, and Boise, as a measure in driving the local market competition. Besides, the Telco will also require providing for a period of about 25 years dark fiber networks across 30 of the intercity routes that pass through nearly 20 states. The officials in the Justice Department observed that the lack of such provisions would result in a “reduction in competition [that] likely would have led to higher prices, lower quality, and reduced access for consumers.”

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Merger Review Standards

CenturyLink® has announced the intentions of its merger in the previous year. It has declared that acquiring Level 3 Communications offers it an additional 200,000 miles of fiber. Meanwhile, the Telco manages an existing 250,000-route mile fiber network in the country. CenturyLink® also provides various other services such as cloud and managed hosting services for businesses. The approval for the Level 3 acquisition has earned approval from a majority of the Republicans in the FCC.

However, Mignon Clyburn a prominent Democrat has held back his vote. According to Clyburn’s office, the new FCC approval to CenturyLink® “radically alters the commission’s long-standing merger review standards.” Still, both CenturyLink® and Level 3 consider that the approval of this merger by the FCC will open up competition with other rival providers like AT&T® and Verizon Communications®.

Currently, CenturyLink® has a subscriber base of approximately six million internet customers, making it one of the fastest internet provider in the country. A major part of its revenue is generated by trading many of its network services to businesses. However, there has been a decline in the revenue earned by the Telco recently, as some of its customers made accusations and lawsuits alleging that CenturyLink® charged them for services, which they did not subscribe for.