FCC Officially Approves CenturyTel-Embarq Merger

As we discussed earlier this week, the FCC has officially approved the merger of CenturyTel and Embarq. The new company will be called CenturyLink. According to CenturyTel, the merger now has received all necessary approvals, and the companies expect the merger to be effective on July 1, 2009.

As is the case with most mergers, there were several conditions placed on the new company to gain FCC approval.

Among those conditions, broadband criteria include:

• The merged company will offer retail broadband Internet access service to 100 percent of its broadband eligible access lines within three years of the Transaction Closing Date.
• The merged company will make available retail broadband Internet access service with a download speed of 768 kbps to 90 percent of its broadband eligible access lines using wireline technologies within three years of the Transaction Closing Date. The merged company will make available retail broadband Internet access service in accordance with the FCC’s current definition of broadband to the remaining broadband eligible access lines using alternative technologies and operating arrangements, including but not limited to satellite and terrestrial wireless broadband technologies.
• In addition, the merged company will make available retail broadband Internet access service with a download speed of (1) 1.5 Mbps to 87% of the broadband eligible access lines within two years of the Transaction Closing Date and (2) 3 Mbps to 75% of broadband eligible access lines within one year of the Transaction Closing Date, 78% of broadband eligible lines within two years of the Transaction Closing Date, and 80% of broadband eligible lines within three years of the Transaction Closing Date.
• Broadband eligible access lines are defined as retail single-line residential and single-line business access lines.

There were several other conditions listed, all of which can be accessed in the actual FCC order. CenturyLink will have approximately 7.5 million access lines, more than two million broadband customers and more than 400,000 video subscribers, across a 33 state footprint.