The Federal Communications Commission today approved CenturyLink Inc.'s $22 billion acquisition of Qwest Communications International Inc., but required concessions including a broadband program for low-income consumers and boosting overall broadband capacity.
The Justice Department cleared the deal, which was announced in April 2010, last summer without a second request for information, signaling the deal raised no antitrust red flags.
The FCC, however, considers whether telecom transactions are in the public interest. To satisfy those concerns, the FCC is requiring the post-merger company to launch a “major broadband adoption program” for millions of low income consumers, offering qualifying households broadband starting at less than $10 per month and a computer for less than $150.
The company must also increase the capacity of the Qwest network, bringing broadband with actual download speeds of at least 4 megabits per second, or Mbps, to at least 4 million more homes and businesses, and at least 20,000 more anchor institutions, such as schools, libraries, and community centers. It also has to more than double the number of homes and businesses that can get 12 Mbps broadband, and more than triple the number that can get 40 Mbps broadband.
The two companies serve local markets in 37 states with approximately 5 million broadband customers, 17 million access lines, 1,415,000 video subscribers and 850,000 wireless consumers.
Under the deal, Qwest will operate as a wholly owned subsidiary of CenturyLink.
In a March 9 letter to the FCC, CenturyLink counsel Karen Brinkmann and Alexander Maltas of Latham & Watkins noted that the two companies “have almost perfectly complementary footprints, without any significant overlapping territories."
In agreeing to the FCC’s requirements, CenturyLink wrote that the “FCC will be assured that its approval of this transaction will significantly advance the Commission’s goals of promoting infrastructure investment and expanding broadband availability for all Americans without any risk of harm to competition or consumers.”
Qwest was represented by Wilmer Culter Pickering Hale and Dorr.