Frontier: CenturyLink-Level 3 Merger 'Contrary to the Public Interest' Without Conditions

In an FCC filing, Frontier Communications said approving the CenturyLink-Level 3 merger without conditions could hurt rural broadband deployment and affordability.

Edward Gately, Senior News Editor

February 21, 2017

2 Min Read
Terms and Conditions

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

CenturyLink’s proposed acquisition of Level 3 Communications could hurt broadband providers financially and adversely affect rural broadband deployment.

That’s according to Frontier Communications’ filing with the Federal Communications Commission. The CenturyLink-Level 3 merger is anticipated to close on Sept. 30.

Approval of the merger “without sufficient conditions is contrary to the public interest, fair and reasonable competition, and the continued effort to deploy critical affordable broadband services that drive economic growth and prosperity across the nation, especially in rural communities,” Frontier said.

“Frontier is concerned that applicants will use their increased scale to avoid paying agreed upon amounts, either through tariffed rates or commercial agreements, to smaller competitors,” it said. “If left unchecked, the applicants will leverage their stronger market position as long-haul and core network providers to potentially squeeze competitors and unnecessarily drive up costs for rural broadband providers and thereby adversely affect rural broadband deployment.”

According to the filing, Level 3, and to a lesser extent CenturyLink, has been “unreasonably refusing to pay or delaying payment on millions of dollars for services rendered by Frontier.”{ad}

“Frontier, as a provider of data, video and voice services to commercial and consumer customers in 29 states, has extensive agreements with Level 3 and CenturyLink for high-capacity data services, including Internet backbone transmission and long-haul services,” Frontier said. “These services are critical for Frontier to serve its customers, especially in the more rural portions of its footprint. Frontier sells services to Level 3 and CenturyLink, particularly where the applicants are serving enterprise customers in Frontier’s service area. Rather than timely paying amounts due, however, Level 3 in particular disputes a significant number of charges and is often delayed in remitting payments.”

In response to Frontier’s FCC filing, CenturyLink issued the following statement: “We respect the FCC comment process, which gives interested parties the opportunity to offer their comments. We believe that this transaction meets the public-interest requirements and will strengthen the nation’s IP infrastructure and provide competitive alternatives for the enterprise business segment.”

Level 3 declined comment.

Frontier is concerned that the merger will hurt rural broadband deployment and affordability “both for its own customers and for other smaller providers who may not have the resources to actively comment in this proceeding.”

“Moreover, because Level 3’s actions drive up the costs of doing business and negatively implicate deployment capabilities, they directly influence the health and prosperity of the labor market and local economies of sensitive rural communities,” it said. “In crafting conditions, the commission should: (1.) require that CenturyLink and Level 3 be current on all balances greater than 90 days outstanding; (2.) require that applicants timely resolve all disputes within 180 days; and (3.) establish a specific commission contact for complaints about the applicants disputing an unreasonable amount of bills and taking an excessive amount of time to respond.”

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About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

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