The Federal Communications Commission (FCC) has approved CenturyLink, Inc.'s proposed acquisition of Level 3 Communications, Inc. (NYSE: LVLT) with minor restrictions. The FCC approval was the last regulatory hurdle standing in the way of completing the $34 billion deal, which CenturyLink will close swiftly.
"The FCC's approval of CenturyLink's acquisition of Level 3 is great news and means we now have all the regulatory approvals we need to close the transaction," said CenturyLink Senior Vice President for Public Policy and Government Relations John F. Jones. "We anticipate closing the transaction effective November 1, 2017."
As a requirement of its approval, the FCC has barred CenturyLink from raising service prices for five years in 10 locations where the Commission determined that the current and likely future lack of competition might adversely affect customers. Those locations are:
8855 Grand Ave., West Des Moines, IA 50266
300 O'Malley Ave., Schriever AFB, CO 80912-3001
170 MacGregor Ave., Estes Park, CO 80517
90 Ramon Lopez Rd., Bernardo, NM 87006
2397 Loop Rd., Chambersburg, PA 17202-8847
97 Progress Blvd., Shippensburg, PA 17257-9053
39580 S. Lago Del Oro Pkwy., Tucson, AZ 85739-1091
850 E. Ocean Hwy., Holly Ridge, NC 28445-8714
700 Holiday Trail Ln., Charlottesville, VA 22903
15760 W. Power Line St., Crystal River, FL 34428-6708.
The FCC's admonition to bar price increases in these locations as a means of addressing competitive imbalance follows a requirement earlier this month from the Department of Justice that the combined company divest certain metro network and dark fiber assets (see "DoJ: CenturyLink must divest assets to buy Level 3"). The California Public Utilities Commission, the last of the state regulatory authorities to rule on the merger, granted its approval October 12. CenturyLink announced it had reached agreement to buy Level 3 last October (see "CenturyLink will buy Level 3 for $34 billion").
The FCC approval came despite squabbling among the Democratic and Republican commissioners over the process by which the merger was reviewed. The minority commissioners argued that the review process introduced a new standard for determining whether the transaction was ultimately in the public's best interest; the Republicans disagreed. Democratic Commissioner Mignon Clyburn dissented against approval as a result; her fellow Democratic commissioner, Jessica Rosenworcel, approved in part and dissented in part.
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