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State staff propose numerous conditions on CenturyLink’s purchase of Qwest telephone lines
Sept. 27, 2009
Docket Number: UT-100820
Editor’s note: This news release reflects the position of the telecommunications staff of the Washington Utilities and Transportation Commission (UTC) and NOT the views of the three-member commission. It discusses a staff recommendation that the commissioners have not yet reviewed. Any positions taken or comments offered by the commission staff regarding this proceeding should be attributed clearly to staff members and NOT to the UTC.
OLYMPIA, Wash. – Aimed at protecting customers, state regulatory staff today recommended 45 conditions on the proposed sale of Qwest Communications’ landline residential and commercial telephone business in Washington to CenturyLink.
Staff members of the Washington Utilities and Transportation Commission (UTC) suggested approving CenturyLink’s proposed acquisition of Qwest’s landline phone lines provided the company meet numerous conditions outlined in testimony filed today.
The UTC’s staff recommendations are not binding on the three-member commission, which expect to make a final decision on the sale in March 2011.
Among the conditions proposed by staff are:
· Freezing residential and business local telephone rates for three years after the sale closes.
· Expanding high-speed Internet access in Washington.
· Making sure customers are not harmed by increases in overall management costs resulting from the merger.
· Maintaining a similar level of annual capital investments and maintenance expenditures by the new company in Washington.
· Requiring stockholders, not ratepayers, to pay for branding and transition costs.
· Submitting regular reports to the UTC to identify merger savings.
· Conducting extensive planning and preparation to ensure customer services such as billing and filing new orders are not hurt by transition to the new company.
UTC staff also recommended that phone customers receive credits if the company’s service quality does not meet specific standards. The new company also would be required to pay residential customers an additional $10 – from $25 to $35 – for missed service repairs or installation appointments.
Last April, CenturyLink and Qwest announced an agreement in which CenturyLink would acquire Qwest’s 10.3 million landline phone lines as part of a $10.6 billion merger. Shareholders from each company approved the merger in August. The Department of Justice has approved the transaction and a decision is still pending before the Federal Communications Commission. Government regulatory approval is needed in 20 states. California, Georgia, Louisiana, Mississippi, Ohio, Hawaii, Maryland, New York, West Virginia and the District of Columbia have already approved the business deal. The companies hope to complete the merger by the first half of 2011.
The commission has received two comments, one undecided and one opposed to the proposed transaction. Customers who would like to comment on the case are encouraged to write the UTC at: P.O. Box 47250 Olympia, Wash., 98504, e-mail comments to comment@utc.wa.gov or call toll-free 1-888-333-9882. The commission’s deadline for accepting public comments is Jan. 7, 2011. For those who would like to give comments orally, the commission will hold a public hearing at 5:30 p.m., Wednesday, Jan. 5, 2011 in the second-floor hearing room of the UTC’s headquarters, 1300 S. Evergreen Park Dr., S.W. Olympia, Wash.
Monroe, La.-based, CenturyLink was formed through a 2009 merger of CenturyTel and Embarq, two telecommunications companies. CenturyLink is the fourth-largest local phone company in the United States and the third-largest in Washington, serving about 200,000 phone lines in such cities as Carnation, Cheney, Cowiche, Fall City, Fox Island, Friday Harbor, Gig Harbor, Goldendale, Lake Quinault, Montesano, North Bend, Randle, Packwood, Poulsbo, Ritzville, Snoqualmie Pass, Sprague, Twisp, Wapato, Winthrop and Zillah.
Denver-based Qwest is the largest local phone company in Washington serving approximately 1.3 million telephone lines. The company provides phone service to many larger cities including: Seattle, Tacoma, Bellevue, Olympia, Bellingham, Aberdeen, Longview, Bremerton, Spokane, Moses Lake, Yakima, Pasco and Walla Walla. Qwest also provides traditional phone service in 14 mostly mid-Western and Western states.
If it achieves regulatory approval, the combined new company (as yet not named) will create the nation’s third-largest landline telephone company, serving about 17 million phone lines in 37 states.
The UTC is the state agency in charge of regulating the rates and services of telephone companies operating in Washington.
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Editor’s note: A copy of the UTC staff recommendation is available at the commission’s website: www.utc.wa.gov/100820.
