Business

CenturyLink merger hits bump in Boise as government raises antitrust concerns

Glass fibers make up fiber optic cable that carries Internet traffic. So much of that traffic in Boise and two other cities is carried by CenturyLink and Level 3 Communications that the Justice Department ordered the divestiture of Level 3 assets in the cities before the companies can merge.
Glass fibers make up fiber optic cable that carries Internet traffic. So much of that traffic in Boise and two other cities is carried by CenturyLink and Level 3 Communications that the Justice Department ordered the divestiture of Level 3 assets in the cities before the companies can merge. Provided by Alcatel Lucent via The New York Times

CenturyLink has agreed to sell off assets from Level 3 Communications in the Boise area in exchange for federal approval of a merger between the two telecommunications companies.

When the $34 billion merger is completed, which might be any day now, it’s unclear how it might affect CenturyLink staffing in Idaho. The company, the successor to U.S. West and, before that, Mountain Bell, has 1,060 employees of its 40,000 employees in the state.

“The organizational structure of the combined company is not yet complete, so impact to employment in the Boise area can’t be determined,” CenturyLink spokesman Stephen Mosher said.

The merger — announced a year ago — was touted by the two companies as a way to combine Level 3’s business-broadband and Internet-backbone services with the consumer and business services offered to CenturyLink’s 6 million customers. CenturyLink would gain 200,000 miles of fiber-optic networks, the Denver Post reported.

Existing customers of CenturyLink, which is based in Louisiana and operates in Idaho and 36 other states, will not see any changes, a spokesman said.

Level 3, with its headquarters located north of Denver, employs 12,500 workers, spokeswoman Francie Dudrey said. The company does not list its employees by state, so she said she could not provide figures on how many employees work in Idaho.

This month, the U.S. Department of Justice found that CenturyLink would control 70 percent of the connections between buildings and fiber optic lines used to connect to the Internet from Boise to Nampa, violating federal antitrust laws.

The government raised the same concern about two other cities where both companies do business: Albuquerque, New Mexico, and Tucson, Arizona. In Albuquerque, CenturyLink would control 90 percent of the market without divesting Level 3 operations; and in Tucson, 80 percent, the government said.

“Without Level 3 as a competitive constraint in these highly concentrated markets, the merged firm will have the incentive and ability to increase prices above competitive levels and reduce quality of service,” wrote Makan Delrahim, an assistant attorney general in the Justice Department’s Antitrust Division.

CenturyLink has up to six months to sell the Boise, Albuquerque and Tucson assets.

“CenturyLink retains all of its existing networks and business operations in these three metro areas and will continue to provide a full suite of telecommunications and data services to residential and business customers,” Mosher said.

A federal judge in in Washington, D.C., has tentatively approved the agreement the companies made with the government, though final approval must await the completion of the deal’s terms within the six months.

It’s not clear who might buy Level 3’s Boise assets. CenturyLink has not said whether it has received any offers.

“There’s nothing there that we’re really interested in,” said Greg Lowe, CEO of Syringa Networks, a Boise-based provider of fiber optic connections to businesses.

A representative for CableOne, which also offers Internet service through fiber optic cable in the Boise area, could not be reached.

CenturyLink also agreed to sell its so-called “dark fiber” that connects pairs of cities on 30 routes in other states to preserve competition there. Dark fiber is fiber-optic cable not currently used.

John Sowell: 208-377-6423, @JohnWSowell

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