CenturyLink said Monday it is moving ahead with buying Broomfield’s Level 3 Communications after receiving regulatory approval from Colorado.
The two companies, which provide internet to much of the U.S. and beyond, are expected to become one by Sept. 30, following nearly a year of gaining regulatory approvals from states where they operate. So far, more than 20 states have approved the deal.
For Colorado, approval by the Public Utilities Commission came in June. But not before PUC staff expressed concern on how the merger would impact “competition for telecommunications services.” While CenturyLink provides telephone and internet services to consumers and businesses, Level 3 owns and manages much of the internet backbone that is leased to and connects different internet services and third parties to one another.
Tim Kunkleman, CenturyLink’s director of public policy, told the commission that the merger is to help the combined company better compete for enterprise and wholesale customers. He said there will be no impact on retail customers, primarily the consumers who subscribe to CenturyLink’s home telephone and internet services.
According to the approved PUC application, CenturyLink also agreed not to end before December 2019 the Colorado Performance Assurance Plan, which provides annual performance measurements to “assure that wholesale performance does not deteriorate.” Level 3 also agreed not to end commercial wholesale contracts, which leases dark fiber to third parties, “for merger-related reasons.”
Colorado is among more than 20 states that have approved or cleared the merger, which was first announced in October 2016. CenturyLink, which acquired Denver-based Qwest in 2011, has a sizeable presence in the state with about 4,600 of its 40,000 employees here.
CenturyLink would gain 200,000 miles of fiber-optic networks in the deal, while Level 3 reduces operating losses by $10 billion. CenturyLink officials said the company would maintain a large presence in Colorado, but CenturyLink will remain headquartered in Monroe, La. Level 3 employs about 4,000 of its 12,600 people in Colorado
While CenturyLink CEO Glen F. Post III will remain chief executive of the combined company, Level 3’s chief executive Jeff Storey will takeover the CEO role on Jan. 1, 2019.
