FCC Approves CenturyLink-Qwest, With Broadband Deployment, Not Net Neutrality
The FCC unanimously approved CenturyLink’s acquisition of Qwest, the commission said Friday. The deal was approved, as expected (CD March 18 p1), without net neutrality conditions. Chairman Julius Genachowski and his staff felt the conditions weren’t needed because it was a horizontal merger, unlike Comcast-NBC Universal’s vertical merger, and neither CenturyLink nor Qwest was producing content, an FCC official said. The commission imposed net neutrality conditions in the AT&T-BellSouth deal, but the CenturyLink-Qwest deal touches fewer Internet subscribers, the official said.
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Genachowski said the curbs he imposed will “move the needle on broadband adoption.” The companies have committed to a host of broadband deployment and adoption conditions that the merged company will roll out over seven years (CD March 11 p1). “Congress has directed us to approve transactions if the public interest benefits outweigh the harms,” Genachowski said. “Here, that test is clearly met: The conditions we've imposed should effectively protect against the identified transaction-specific harms, and the company’s commitments to help connect so many more Americans to broadband is an important and substantial public-interest benefit.”
Commissioner Mignon Clyburn said the broadband conditions were “a significant step,” but she would have preferred that the new company commit to “specific, verifiable” conditions to deploy rural broadband. Clyburn and Commissioner Michael Copps each asked Genachowski to attach net neutrality conditions in the months ahead of the approval, FCC officials said. Copps was the most emphatic, officials said. “I also remain concerned that the merger will change the post-merger company’s incentives with respect to its service offerings,” Clyburn said Friday. “In prior mergers, applicants have addressed such incentives through commitments that ensure consumers continue to enjoy nondiscriminatory access to Internet services and applications. Unfortunately, we do not have that backstop here.” In the end, the Democrats felt that the deal was still important enough to support without neutrality conditions, FCC officials said. CenturyLink had set April 1 as its goal for merger approval.
Free Press, which had lobbied to insert net neutrality conditions on CenturyLink-Qwest, is disappointed in the commission’s vote and that the conditions imposed were “not meaningful,” the group said. “Free Press doesn’t oppose every merger that comes before the Commission,” Political Adviser Joel Kelsey said. “We believed the Chairman’s office would follow past precedent to ensure this transaction met the agency’s public interest standard."
Speculation is already mounting on what CenturyLink’s next move will be. The company has grown swiftly, but mostly through wireline mergers. Many industry officials and analysts expect the company will next branch into wireless -- either by taking over a cellular company or by buying spectrum on its own. An FCC official said Friday that either move might be welcomed because it would increase competition in the wireless marketplace.