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State approves CenturyLink-Qwest telephone merger
March 14, 2011
Docket Number: UT-100820
OLYMPIA, Wash. – Washington state regulators today unanimously approved the pending merger of telecommunication providers CenturyLink, Inc. and Qwest Communications, subject to conditions designed to protect the state’s customers of the two companies.
The Washington Utilities and Transportation Commission (UTC) adopted five separate multiparty settlement agreements resolving issues that will provide rate stability for residential and business telephone customers, protect consumers from merger costs and expand broadband Internet service to underserved areas in Washington.
As part of the approval process, the commission modified some of the settlement agreements and imposed additional conditions on the transaction. The companies have 15 calendar days to state objections to the extra conditions placed on the business deal by the commission. The merger is expected to close in the first half of this year.
“The specific service commitments agreed to by CenturyLink and Qwest in the five settlement agreements as well as additional conditions imposed by the commission will prevent harm to consumers in the form of caps on potential rate increases, preservation of retail service quality, expanded investment in broadband services, and continuation of important wholesale service requirements that support residential and enterprise telecommunications competition in Washington,” said the three commissioners in their written decision.
In adopting the settlements, the UTC approved a number of provisions to shield customers from being harmed by this transaction. These include:
· Capping local telephone residential rates for at least three years after the sale closes.
· Requiring the combined company to make an $80 million investment in broadband so high-speed Internet service will be available to more Washington consumers.
· Preventing the new company from passing on merger costs to ratepayers.
· Reporting merger savings and cost-cutting measures to the UTC.
· Reducing the new company’s fees charged to other carriers which should help lower long-distance rates for calls made within the state.
· Submitting detailed plans to UTC staff before transitioning to any new computer operating systems that affect customer services like billing or filling new phone orders.
The multiparty settlement agreements approved by the commission were reached between the companies and UTC staff members, the Public Counsel Section of the Attorney General’s Office, the Department of Defense and several unaffiliated telecommunications carriers.
Last April, CenturyLink and Qwest announced an agreement in which CenturyLink would acquire Qwest’s entire business, including 10.3 million landline phone lines as part of a $10.6 billion merger. Shareholders from each company approved the merger last August. The Department of Justice and 19 states have approved the transaction. With Washington’s approval today, the deal still awaits approval in Oregon and at the Federal Communications Commission.
The commission has received 95 public comments to date – seven in favor, 51 opposed and 37 undecided or neutral.
Headquartered in Monroe, La., CenturyLink was formed through the merger of CenturyTel and Embarq in 2009. 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, Prosser, Ritzville, Snoqualmie Pass, Sprague, Twisp, Vashon, 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 receives all necessary regulatory approvals, the combined company 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 that regulates the rates and services of telephone companies operating in Washington. The commission does not regulate wireless carriers.
Editor’s note: A copy of the order is available at: www.utc.wa.gov/100820.
Posted/updated: 03/14/2011
