Federal Communications Commission
Before the
Federal Communications Commission
Washington, D.C. 20554
FCC 11-47
In the Matter of
Applications filed by Qwest Communications
International Inc. and CenturyTel, Inc. d/b/a
CenturyLink for Consent to Transfer Control
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WC Docket No. 10-110
Adopted: March 18, 2011
MEMORANDUM OPINION AND ORDER
Released: March 18,2011
By the Commission: Chairman Genachowski and Commissioner Clyburn issuing separate statements;
Commissioners Copps, McDowell, and Baker concurring and issuing separate
statements.
TABLE OF CONTENTS
Heading Paragraph #
I. INTRODUCTION 1
II. BACKGROUND 3
A. Description of the Applicants 3
1. CenturyLink, Inc 3
2. Qwest Communications International Inc .4
B. Description of the Transaction 5
III. STANDARD OF REVIEW AND PUBLIC INTEREST FRAMEWORK 7
IV. APPLICANTS' QUALIFICATIONS TO HOLD LICENSES 11
V. POTENTIAL PUBLIC INTEREST HARMS 13
A. Horizontal Competitive Effects 13
1. Actual Competition 14
2. Potential Competition 19
B. Operations Support Systems and Wholesale Customer Service 20
C. Other Issues 26
VI. POTENTIAL PUBLIC INTEREST BENEFITS 30
A. Analytical Framework 31
B. Analysis 33
VII.ORDERING CLAUSES 44
APPENDICES
APPENDIX A-List of Commenters
APPENDIX B-List of Licenses and Authorizations Subject to Transfer of Control
APPENDIX C-CenturyLink Commitments
Federal Communications Commission FCC 11-47
I. INTRODUCTION
1. Qwest Communications International Inc. (Qwest) and CenturyLink, Inc. (CenturyLink)1
(together, Applicants) seek Commission approval to transfer control of licenses and authorizations held
by Qwest and its subsidiaries from Qwest to CenturyLink.
2
In accordance with the terms of sections
214(a) and 31 O(d), we must determine whether the Applicants have demonstrated that the proposed
transaction would serve the public interest, convenience, and necessity.3
2. We have carefully reviewed the record and requested additional data from the Applicants.
We find that this transaction holds promise for increased broadband deployment and adoption and
increased competition for multichannel video services. The increased scale and scope of the combined
company, with its larger national footprint and strengthened financial position, should enhance its ability
to compete, support the deployment of broadband to unserved areas, and accelerate the availability of
advanced services throughout the merged entity's expanded territory. We conclude that, with certain
conditions set forth below, the likely public interest benefits of the transaction outweigh the potential
public interest harms, and the transaction therefore will serve the public interest.
4
Accordingly, we grant
IOn May 20, 2010, the transferee's company name changed from CenturyTel, Inc. to CenturyLink, Inc. See Qwest
Communications International Inc., Transferor, and CenturyTel, Inc. d/b/a CenturyLink, Transferee, Application for
Transfer of Control Under Section 214 of the Communications Act, as Amended, at 38 n.63 (filed May 10,2010)
(Application).
2 Applicants filed a series of applications pursuant to sections 214 and 31 O(d) of the Communications Act of 1934,
as amended, 47 U.S.C. §§ 214, 31O(d), and section 2 of the Cable Landing License Act, 47 U.S.c. § 35. See
Application. A complete list of the licenses and authorizations at issue is attached to this Order as Appendix B. The
Applicants also have other applications and petitions pending before the Commission, which may be granted prior to
consummation of the proposed transaction. Applicants request that any grant include authority for CenturyLink to
acquire control with respect to all licenses and authorizations issued or assigned to Qwest or its subsidiaries during
the pendency of the Application and prior to the consummation of the proposed transaction, and of all applications
or petitions pending at the time of consummation of the proposed transaction. Id. at 40-41.
3 SBC Communications, Inc. and AT&T Corp. Applications for Approval ofTransfer ofControl, WC Docket No.
05-65, Memorandum Opinion and Order, 20 FCC Rcd 18290, 18292, para. 2 (2005) (SBC-AT&T Order); Verizon
Communications, Inc. and MCI, Inc. Applications for Approval ofTransfer ofControl, WC Docket No. 05-75,
Memorandum Opinion and Order, 20 FCC Rcd 18433, 18435, para. 2 (2005) (Verizon-MCI Order); Nextel
Communications, Inc. and Sprint Corporation Applications for Consent to Transfer Control ofLicenses and
Authorizations, WT Docket No. 05-63, File Nos. 0002031766, et ai., Memorandum Opinion and Order, 20 FCC Rcd
13967, 13976, para. 20 (2005).
4 We also note that 20 states and the District of Columbia have approved this transaction. See Qwest
Communications Company, LLC Advice Letter 172, Indirect Transfer ofControl, Advice Letter Status Certificate
(Cal. Pub. Utils. Comm'n June 14,2010); Joint Application ofQwest Communications Company, LLC and
CenturyLink, Inc. For Approval ofIndirect Transfer ofControl ofQwest Communications Company, LLC, Docket
No. 2010-0110, Decision and Order (Haw. Pub. Utils. Comm'n June 15,2010); Application ofQwest
Communications International, Inc. and CenturyLink, Inc. for Approval ofIndirect Transfer ofControl ofQwest
Communications Company, LLC, Case No. 1O-0717-TP-ACO, Case Action Form (Pub. Utils. Comm'n of Ohio June
29,2010); Joint Petition ofQwest Communications International, Inc. and CenturyLink, Inc. for Expedited Approval
ofIndirect Transfer ofControl ofQwest Communications Company, LLC, ML# 123575, S-1 094, Letter (Md. Pub.
Servo Comm'n July 7, 2010); Application for Approval ofQwest Communications Company, LLCfor [} Indirect
Transfer ofControl, Docket Nos. 6543, 10664,5043,6094, Letter (Ga. Pub. Servo Comm'n July 28, 2010); Joint
Petition for Expedited Consent and Approval ofIndirect Transfer ofControl ofQwest Communications Company,
LLC, Case No. 10-0825-T-PC, Commission Order (W.Va. Pub. Servo Comm'n Aug. 3, 2010); Joint Petition of
Qwest Communications Company International, Inc. and CenturyLink, Inc., et al. for Approval ofthe Transfer of
Control ofQwestCommunications Company, LLC, Case 1O-C-0345, Memo Approved & Ordered (N.Y. State Pub.
Servo Comm'n Aug. 24,2010); Joint Petition for Expedited Approval ofIndirect Transfer ofControl Filed By Qwest
(continued....)
2
Federal Communications Commission FCC 11-47
our consent to the transfer conditioned on compliance with the voluntary commitments listed in
Appendix C, which constitute binding and enforceable conditions of our approval.
II. BACKGROUND
A. Description of the Applicants
1. CenturyLink, Inc.
3. CenturyLink, a publicly traded Louisiana corporation headquartered in Monroe, Louisiana,
is a holding company that conducts its business operations principally through wholly owned
subsidiaries that offer communications services, including local and long distance voice; wholesale local
network access; broadband Internet access; and information, entertainment, and fiber transport services
(Continued from previous page) -------------
Communications International, Inc. and CenturyLink, Formal Case No. 892, Letter (D.C. Pub. Servo Comm'n Aug.
30,2010); Joint Petition for Approval ofAgreement and Plan ofMerger Dated April2l, 2010 By and Between
CenturyLink, Inc. and Qwest Communications International, lnc., Docket No. 201O-UA-218, Order (Miss. Pub.
Servo Comm'n Sept. 14,2010); CenturyLink, Inc. and Qwest Communications International, Requestfor Letter of
Non-Opposition to the Indirect Transfer ofControl, Docket No. U-31379, Order (La. Pub. Servo Comm'n Sept. 17,
2010); Joint Petition for Approval ofthe Indirect Transfer ofControl ofQwest Communications Corporation of
Virginia, Inc.; Central Telephone Company ofVirginia d/b/a CenturyLink; United Telephone Southeast LLC d/b/a
CenturyLink; and CenturyTel Long Distance, LLC d/b/a CenturyLink, Case No. PUC-201O-00023, Order Granting
Approval (Va. State Corp. Comm'n Sept. 24,2010); Joint Application for Approval ofthe Change ofControl of
Qwest Communications Company, LLC, Docket No. A-201O-2176733, Order (Pa. Pub. Util. Comm'n Oct. 14,
2010); Qwest Communications International, Inc., and CenturyTel, Inc., Docket No. SPU-201O-0006, Order
Approving Settlement Agreements, Granting Motions to Withdraw, and Allowing Proposed Reorganization (Iowa
Utils. Bd. Nov. 19, 2010) (Iowa Utils. Bd. Order); Joint Application ofQwest Communications International, Inc.
and CenturyLink, Inc., for Approval ofIndirect Transfer ofControl ofQwest Corporation, Qwest Communications
Company, LLC, and Qwest LD Corp., Docket No. D201O.5.55, Final Order Approving Application, Order No.
7096e (Mont. Pub. Servo Comm'n Dec. 14,2010); Joint Application ofQwest Communications International, Inc.,
and CenturyLink, Inc., for Approval ofIndirect Transfer ofControl ofQwest Corporation, El Paso County
Telephone Company, Qwest Communications Company, LLC and Qwest LD Corp., Docket No. lOA-350T, Initial
Commission Decision Granting Approval, Decision No. C11-001 (Colo. Pub. Utils. Comm'n Dec. 15,2010); Qwest
Communications Company, LLC and CenturyTel, Inc. for Approval ofIndirect Transfer ofControl ofQwest
Communications Company, LLC, Docket No. TMI 0050343, Order of Approval (N.J. Bd. of Pub. Utils. Dec. 16,
2010); Joint Application ofQwest Communications International, Inc., and CenturyLink, Inc., for Approval of
Indirect Transfer ofControl ofQwest Corporation and Qwest Communications Company, LLC and Qwest LD
Corp., Application No. C-4280, Order (Neb. Pub. Servo Comm'n Jan. 4, 2011); Joint Application ofQwest
Communications International, Inc. and CenturyTel, Inc. for Approval ofIndirect Transfer ofControl ofQwest
Corporation, Qwest Communications Company, LLC and Qwest LD Corporation, Docket No. 10-049-16, Report
and Order (Pub. Servo Comm'n of Utah Jan. 4, 2011); Press Release, Minnesota Public Utilities Commission, The
Minnesota Public Utilities Commission Approves Acquisition of Qwest by CenturyLink (Mar. 3, 2011),
http://www.puc.state.mn.usJPUC/telecom/013202; Joint Application ofQwest Corporation, Qwest Communications
Company, LLC, Qwest LD Corp. dba Qwest Long Distance, Embarq Communications, Inc., Embarq Payphone
Services, Inc. and CenturyTel Solutions, LLCfor Approval ofthe Proposed Merger ofTheir Parent Corporations
Qwest Communications International Inc. and CenturyTel, Inc., Docket Nos. T-01051B-1O-0194, T-0281lB-lO 
0194, T-04190A-IO-0194, T-20443A-IO-0194, T-03555A-1O-0194, T-03902A-10-0194, Opinion and Order (Ariz.
Corp. Comm'n Mar. 9, 2011) (Arizona Corp. Comm 'n Order); Joint Application ofQwest Communications
International, Inc. and CenturyTel, Inc. for Approval ofIndirect Transfer ofControl ofQwest Corporation, Qwest
Communications Company, LLC and Qwest LD Corporation, Docket No. 10-049-16, Final Order Approving and
Adopting, Subject to Conditions, Multiparty Settlement Agreements and Authorizing Transaction (Wash. Utils. &
Transp. Comm'n Mar. 14,2011) (Washington UTC Order). The Oregon Public Utility Commission has not yet
approved the transaction.
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Federal Communications Commission FCC 11-47
through copper and fiber networks to consumers and businesses in 33 states.
5
According to the
Application, as an incumbent local exchange carrier (LEC), CenturyLink provides local exchange
services to approximately 7 million telephone access lines, and provides broadband Internet access
services to more than 2.2 million customers.
6
CenturyLink also provides telecommunications services as
a competitive LEC in certain local and regional markets.
7
Capital Research and Management Company
(CRMC) directly controls an approximate 12 percent interest in CenturyLink.
8
No other individual or
entity currently owns or controls 10 percent or more of CenturyLink's stock.
9
2. Qwest Communications International Inc.
4. Qwest, a publicly traded Delaware corporation headquartered in Denver, Colorado,
provides an array of telecommunications and broadband Internet access services, including fiber-optic
Internet service, digital switched telephone service, and voice over Internet Protocol (VoIP) services,
through its wholly owned operating companies.
lO
According to the Application, Qwest has
approximately 10.3 million access lines in the 14-state region in which it operates as an incumbent LEC,
and has approximately 3 million broadband customers.
ll
Through its subsidiaries, Qwest sells wireless
services and multichannel video services, and also operates an extensive wholesale business.
12
CRMC
directly controls an approximate 12 percent interest in Qwest.
13
No other individual or entity currently
owns or controls 10 percent or more of Qwest's stock.
14
B. Description of the Transaction
5. Under the terms of an Agreement and Plan of Merger between the Applicants (Merger
Agreement), Qwest and SB44 Acquisition Company (Merger Sub)-a wholly owned subsidiary of
CenturyLink created to effectuate this transaction-will merge in a stock-for-stock exchange.
15
As a
result of the merger, the separate corporate existence of Merger Sub will cease, and Qwest will continue
5 Application at 3. The states are Alabama, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois,
Indiana, Iowa, Kansas, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New
Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas,
Virginia, Washington, Wisconsin, and Wyoming. Id. at 3 n.2.
6 Id. at 3. These figures are as of December 31,2009. Id.
7
Id
.
8 CRMC, a Los Angeles-based U.S. entity, is, in turn, wholly owned by The Capital Group Companies, Inc., also a
Los Angeles-based U.S. entity. Id. at 39.
9
I
d.
10 Id. at 4. The Qwest subsidiaries providing domestic interstate telecommunications services pursuant to Section
214 authority are El Paso County Telephone Company; Qwest Communications Company, LLC (QCC); Qwest
Corporation (QC); Qwest Communications Corporation of Virginia; and Qwest LD Corp. Id. at Exh. 1.
II Id. at 4. Qwest is an incumbent LEC in Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New
Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming. Id. at 4 n.5.
12 Id. QC provides wireless and multichannel video services through sales relationships with Verizon Wireless and
DirecTV. Id. Qwest subsidiary QCC operates a national fiber-optic network and competes nationally for enterprise
and government customers. Id.
13
I
d. at 39.
14
I
d.
15 Id. at 5.
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Federal Communications Commission FCC 11-47
to operate as a wholly owned subsidiary of CenturyLink.
16
CenturyLink will acquire all outstanding
shares of Qwest, with Qwest shareholders receiving 0.1664 CenturyLink shares for each share of Qwest
common stock that they own at closing. I? CenturyLink shareholders are expected to own approximately
50.5% of the combined company, and Qwest shareholders are expected to own approximately 49.5% of
the combined company.18 Following the transaction, four directors of the Qwest Board of Directors will
be added to the CenturyLink Board of Directors, but a majority of the Board of post-merger CenturyLink
will be directors elected by pre-merger CenturyLink's shareholders.
19
CRMC will hold an interest of
approximately 12% in post-merger CenturyLink.
20
No other individual or entity will own or control
10% or more of CenturyLink's stock post-consummation.
21
6. The Applicants contend that the transaction will serve the public interest. They claim that,
by creating a stronger company with a national platform, the transaction will help to accelerate
deployment of broadband services in unserved and underserved areas for both residential and business
customers, and will position post-merger CenturyLink to offer more vigorous competition to larger
industry participants in multichannel video and bundled services.
22
For example, in Qwest's local
service territory, post-merger CenturyLink will be able to leverage CenturyLink's investments and
experience in Internet protocol television (IPTV) deployment to compete against cable companies for the
provision of multichannel video services, and the triple play of voice, video, and broadband.
23
The
Applicants also assert that the stronger financial position of post-merger CenturyLink and its robust
national fiber network will allow it to expand Qwest's enterprise and government business to compete
more effectively against market leaders AT&T and Verizon.
24
III. STANDARD OF REVIEW AND PUBLIC INTEREST FRAMEWORK
7. Pursuant to sections 214(a) and 31O(d) of the Communications Act of 1934, as amended
(Communications Act or Act), and sections 34 through 39 of the Cable Landing License Act,25 the
Commission must determine whether the proposed transfer of control of certain licenses and
16 Applicants assert that the transaction contemplates only a parent-level transfer of control of Qwest and will not
effectuate any change in control of CenturyLink, nor will it alter either company's existing operational structure.
Id. at 5-6.
17 Id. at 5.
18
I
d.
19
I
d. at 6.
2° Id. at 39.
21 Id. at 5, 39.
22 Id. at 10-21.
23 Id. at 11,15-18.
24
Id
. at 11,18-19.
25 47 U.S.C. §§ 34-39. The Cable Landing License Act provides that approval of a license application may be
granted "upon such terms as shall be necessary to assure just and reasonable rates and service." 47 U.S.c. § 35.
The Commission does not conduct a separate public interest analysis under this statute. See, e.g., SBC-AT&T Order,
20 FCC Rcd at 18300 n.59; Verizon-MCI Order, 20 FCC Rcd at 18442 n.58; Application ofWorldCom, Inc. and
MCI Communications Corporation for Transfer ofControl ofMCI Communications Corporation to WorldCom,
Inc., CC Docket No. 97-211, Memorandum Opinion and Order, 13 FCC Rcd 18025 (1998) (WorldCom-MCI
Order).
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Federal Communications Commission FCC 11-47
authorizations held and controlled by Qwest will serve the public interest, convenience, and necessity.26
In making this determination, we first assess whether the proposed transaction complies with the specific
provisions of the Act, other applicable statutes, and the Commission's rules?7 If the proposed
transaction would not violate a statute or rule, the Commission considers whether it could result in public
interest harms by substantially frustrating or impairing the objectives or implementation of the
Communications Act or related statutes.
28
The Commission then employs a balancing test weighing any
potential public interest harms of the proposed transaction against the proposed public interest benefits.
29
The Applicants bear the burden of proving, by a preponderance of the evidence, that the proposed
transaction, on balance, serves the public interest,3D If we are unable to find that the proposed transaction
serves the public interest, or if the record presents a substantial and material question of fact, we must
designate the applications for hearing.
31
8. Our public interest evaluation necessarily encompasses the "broad aims of the
Communications Act,,,32 which include, among other things, a deeply rooted preference for preserving
and enhancing competition in relevant markets, accelerating private-sector deployment of advanced
services, ensuring a diversity of license holdings, and generally managing spectrum in the public
interest,33 Our public interest analysis may also entail assessing whether the transaction will affect the
quality of communications services or will result in the provision of new or additional services to
consumers?4 In conducting this analysis, the Commission may consider technological and market
changes, as well as trends within the communications industry, including the nature and rate of change?5
9. Our competitive analysis, which forms an important part of the public interest evaluation, is
informed by, but not limited to, traditional antitrust principles?6 The Department of Justice (DOJ)
26 47 US.c. §§ 214(a), 31O(d). Section 31O(d) of the Act, 47 US.C. § 31O(d), requires that we consider applications
for transfer of Title III licenses under the same standard as if the proposed transferee were applying for licenses
directly under section 308 of the Act, 47 US.c. § 308. See, e.g., AT&TInc. and BellSouth Corporation Application
for Transfer ofControl, WC Docket No. 06-74, Memorandum Opinion and Order, 22 FCC Rcd 5662,5672, para. 19
(2007) (AT&T-BellSouth Order).
27 See Applications Filed for the Transfer ofControl ofEmbarq Corporation to CenturyTel, Inc., WC Docket No.
08-238, Memorandum Opinion and Order, 24 FCC Rcd 8741, 8745-46, para. 9 (2009) (CenturyTel-Embarq Order).
28 Id.
29 See, e.g., AT&T-BellSouth Order, 22 FCC Rcd at 5672, para. 19.
30 See, e.g., id.
31 See, e.g., Application ofEchostar Communications Corp., General Motors Corp., and Hughes Electronics Corp.,
Transferors, and Echostar Communications Corp., Transferee, CS Docket No. 01-348, Hearing Designation Order,
17 FCC Rcd 20559, 20574, para. 25 (2002) (EchoStar-DirecTV Order); Applications ofAT&T Wireless Services,
Inc. and Cingular Wireless Corporation, et al., WT Docket Nos. 04-70,04-254, and 04-323, Memorandum Opinion
& Order, 19 FCC Rcd 21522, 21542-44, para. 40 (2004).
32 AT&T-BellSouth Order, 22 FCC Rcd at 5673, para. 20.
33 See 47 US.c. §§ 254, 332(c)(7), 1302; Telecommunications Act of 1996, Pub. L. No. 104-104, § 706,110 Stat.
56,153 (1996 Act), Preamble; SBC-AT&T Order, 20 FCC Rcd at 18301, para. 17; Verizon-MCI Order, 20 FCC Rcd
at 18443-44, para. 17; see also WorldCom-MCI Order, 13 FCC Rcd at 18030-31, para. 9; cf 47 US.c. §§ 301,
303, 309(j), 31O(d), 521(4), 532(a).
34 See AT&T-BellSouth Order, 22 FCC Rcd at 5673, para. 20.
35 See id.
36 See, e.g., id. at 5673, para. 21.
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Federal Communications Commission FCC 11-47
reviews telecommunications mergers pursuant to section 7 of the Clayton Act, and if it wishes to block a
merger, it must demonstrate to a court that the merger may substantially lessen competition or tend to
create a monopoly.37 Under the Commission's review, the applicants must show that the transaction will
serve the public interest; otherwise the application is set for hearing.
38
DO]'s review is also limited
solely to an examination of the competitive effects of the acquisition, without reference to other public
interest considerations.
39
The Commission's competitive analysis under the public interest standard is
somewhat broader-for example, it considers whether a transaction will enhance, rather than merely
preserve, existing competition, and takes a more extensive view of potential and future competition and
its impact on the relevant market.
40
10. Our analysis recognizes that a proposed transaction may lead to both beneficial and harmful
consequences.
41
Our public interest authority enables us, where appropriate, to impose and enforce
narrowly tailored, transaction-specific conditions to ensure that the public interest is served.
42
Section
303(r) of the Communications Act authorizes the Commission to prescribe restrictions or conditions not
inconsistent with law that may be necessary to carry out the provisions of the Act.
43
Similarly, section
214(c) of the Act authorizes the Commission to impose "such terms and conditions as in its judgment the
public convenience and necessity may require.,,44 Indeed, unlike the role of antitrust enforcement
agencies, our public interest authority enables us to rely upon our extensive regulatory and enforcement
experience to impose and enforce conditions to ensure that the transaction will yield net public interest
benefits.
45
In using this broad authority, the Commission has generally imposed conditions to remedy
37 15 U.S.c. § 18. As of July 15,2010, both the Federal Trade Commission and the Department of Justice Antitrust
Division had completed their review of this transaction and determined not to take any enforcement action during
the Hart-Scott-Rodino waiting period. See FTC, Transaction Granted: Early Termination (July 15,2010), available
at http://www.ftc.gov/bc/earlyterm/2010/07/etl00715.pdf.
38 See, e.g., Applications ofCellco Partnership d/b/a Verizon Wireless and Atlantis Holdings LLCfor Consent to
Transfer Control ofLicenses, Authorizations, and Spectrum Manager and De Facto Transfer Leasing Arrangements
and Petition for Declaratory Ruling that the Transaction Is Consistent with Section 3IO(b)(4) ofthe
Communications Act, WT Docket No. 08-95, Memorandum Opinion and Order and Declaratory Ruling, 23 FCC
Rcd 17444, 17462, para. 28 (2008) (Verizon Wireless-Alltel Order).
39 See id.
40 See, e.g., Verizon Wireless-Alltel Order, 23 FCC Rcd at 17462, para. 28; Applications for Consent to Transfer
Control ofLicenses, XM Satellite Radio Holdings, Inc. to Sirius Satellite Radio Inc., MB Docket No. 07-57,
Memorandum Opinion and Order and Report and Order, 23 FCC Rcd 12348, 12365-66, para. 32 (2008) (XM-Sirius
Order).
41 See, e.g.,AT&T-BellSouth Order, 22 FCC Rcd at 5674, para. 21.
42 See, e.g., Verizon Wireless-Alltel Order, 23 FCC Rcd at 17462, para. 29; XM-Sirius Order, 23 FCC Rcd at 12366,
para. 33; AT&T-BellSouth Order, 22 FCC Rcd at 5674, para. 22.
43
47 U.S.c. § 303(r); see also Verizon Wireless-Alltel Order, 23 FCC Rcd at 17463, para. 29; XM-Sirius Order,
23 FCC Rcd at 12366, para. 33; AT&T-BellSouth Order, 22 FCC Rcd at 5674, para. 22.
44 47 U.S.c. § 214(c); see also Verizon Wireless-Alltel Order, 23 FCC Rcd at 17463, para. 29; XM-Sirius Order,
23 FCC Rcd at 12366, para. 33; AT&T-BellSouth Order, 22 FCC Rcd at 5674, para. 22.
45 See, e.g., Verizon Wireless-Alltel Order, 23 FCC Rcd at 17463, para. 29; XM-Sirius Order, 23 FCC Rcd at 12366,
para. 33; AT&T-BellSouth Order, 22 FCC Rcd at 5674, para. 22; see also Schurz Communications, Inc. v. FCC, 982
F.2d 1043, 1049 (7th Cir. 1992) (discussing the Commission's authority to trade off reduction in competition for
increase in diversity in enforcing public interest standard).
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Federal Communications Commission FCC 11-47
specific harms or confirm specific benefits likely to arise from transactions and that are related to the
Commission's responsibilities under the Act and related statutes.
46
IV. APPLICANTS' QUALIFICATIONS TO HOLD LICENSES
11. As a threshold matter, we must determine whether the Applicants meet the requisite
qualifications to hold and assign and transfer licenses under section 31 O(d) of the Act and the
Commission's rules. In general, when evaluating assignments under section 31O(d), we do not re 
evaluate the qualifications of the transferor.
47
The exception to this rule occurs where issues related to
basic qualifications have been designated for hearing by the Commission or have been sufficiently raised
in petitions to warrant the designation of a hearing.
48
This is not the case here. Thus, we need not re 
evaluate either Qwest's basic qualifications or those of the current Qwest shareholders.
12. Section 31 O(d) also requires that the Commission consider the qualifications of the
proposed transferee as if the transferee were applying for the license directly under section 308 of the
Act. Among the factors that the Commission considers in its public interest inquiry is whether the
applicant for a license or license transfer has the requisite "citizenship, character, financial, technical,
and other qualifications.,,49 No challenges have been raised with respect to the basic qualifications of
CenturyLink, which has previously been found qualified to control entities holding Commission licenses
and authorizations.
V. POTENTIAL PUBLIC INTEREST HARMS
A. Horizontal Competitive Effects
13. In this section, we consider the potential harms to competition arising from the merger. As
a general matter, the potential competitive harms arising from this transaction are limited; in a
transaction spanning 37 states, CenturyLink and Qwest compete against each other in only four markets.
Because CenturyLink and Qwest do currently compete with respect to some services and classes of
customers, we must consider the potential horizontal effects of this merger.
50
46 See, e.g., Verizon Wireless-Alltel Order, 23 FCC Red at 17463, para. 29; XM-Sirius Order, 23 FCC Red at 12366,
para. 33; AT&T-BellSouth Order, 22 FCC Red at 5674, para. 22.
47 See, e.g., Applications ofSprint Nextel Corporation and Clearwire Corporation For Consent to Transfer Control
ofLicenses, Leases and Authorizations, WT Docket No. 08-94, Memorandum Opinion and Order and Declaratory
Ruling, 23 FCC Red 17570, 17582-83, para. 23 (2008) (Sprint Nextel-Clearwire Order); Verizon Wireless-Alltel
Order, 23 FCC Red at 17464, para. 31.
48 See, e.g., Sprint Nextel-Clearwire Order, 23 FCC Red at 17582-83, para. 23; Verizon Wireless-Alltel Order,
23 FCC Red at 17464, para. 31.
49 See AT&T-BellSouth Order, 22 FCC Red at 5756, para. 191; Applications ofSBC Communications Inc. and
BellSouth Corporation for Consent to Transfer ofControl or Assignment ofLicenses and Authorizations,
WT Docket No. 00-81, Memorandum Opinion and Order, 15 FCC Red 25459,25465, para. 14 (2000)
(SBC-BellSouth Order); see also 47 U.S.c. §§ 308, 31O(d); 47 C.F.R. Parts 5, 25, 63.
50 A merger is said to be horizontal when the merging firms sell products that are in the same relevant markets and
are therefore viewed as reasonable substitutes by purchasers of the products. General Motors Corporation and
Hughes Electronics Corporation, Transferors, and The News Corporation Limited, Transferee, Applicationfor
Authority to Transfer Control, ME Docket No. 03-124, Memorandum Opinion and Order, 19 FCC Red 473, 507,
para. 69 (2004) (News Corp.-Hughes Order).
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Federal Communications Commission FCC 11-47
1. Actual Competition
14. The record indicates that there are four significant geographic areas in which CenturyLink
and Qwest provide competing services. In parts of the Orlando, Florida metropolitan area and parts of
the Huntsville, Alabama area, both CenturyLink and Qwest operate as competitive LECs? In addition,
CenturyLink provides facilities-based special access services in two areas where Qwest is the incumbent
LEC: in the Minneapolis, Minnesota metropolitan area and in the OlympialPuget Sound/Gray's Harbor
area in Washington.
52
15. We find that the transaction poses no significant risk of harm to competition in Huntsville
or Orlando, the two areas in which both CenturyLink and Qwest operate as competitive LECs. Both
Applicants' facilities in these two markets are limited, and other competitive providers operate in both
markets.
53
Rather than harming competition, we believe that the combination of the Applicants'
facilities in these markets could result in a stronger competitive LEC and enhance the merged company's
ability to compete against the incumbent LEC.
54
16. Our consideration of potential public interest harms therefore focuses on the two areas
(Minneapolis and Puget Sound/Gray's Harbor), where Qwest is the incumbent LEC, CenturyLink is a
competitive LEC, and CenturyLink has significant Type I last-mile special access facilities.
55
Consistent
with Commission precedent, we conclude that the relevant geographic market for wholesale special
access services is a particular customer's location, because it would be prohibitively expensive for an
enterprise customer to move its office location in order to avoid a "small but significant and
nontransitory increase in the price" of special access service.
56
In addition, as the Commission has
51 Application at 23, 26-28.
52Id. at 26-28. With respect to the territory where CenturyLink is the incumbent LEC, the Applicants state that "it
is possible that ... Qwest has built facilities to serve individual customers within CenturyLink territory," and that
"[a]ny such situations would be limited to sales to customers with multiple sites, within and outside of Qwest
territory." Id. at 23 n.36. There is no evidence in the record to indicate that Qwest's very limited, widely scattered
deployment in CenturyLink's territory is likely to be competitively significant for these customers, or that it will
impact their provider selection process.
53 Id. at 26-28; see also Letter from Karen Brinkmann, Counsel for CenturyLink, Inc., to Marlene H. Dortch,
Secretary, FCC, WC Docket No. 10-110, Attach. (Declaration of Michael R. Hunsucker) (filed Mar. 16,2011).
54Id. at 23, 27-28; see also ADTRAN Comments at 2.
55 Application at 23-25. Type I special access services are offered wholly over a carrier's own facilities, whereas
Type II special access services are provided using a combination of the carrier's own facilities for two of the
segments and the special access services of another carrier for the third segment. See SBC-AT&T Order, 20 FCC
Rcd at 18305, para. 26; Verizon-MCI Order, 20 FCC Rcd at 18448, para. 26. The Commission has previously found
that many purchasers of wholesale special access services view Type I services as substantially superior to Type II
services because of differences in performance, reliability, security, and price. See SBC-AT&T Order, 20 FCC Rcd
at 18305, para. 26; Verizon-MCI Order, 20 FCC Rcd at 18448, para. 26. The Commission has also previously found
that these differences are sufficiently large that Type I special access services fall into a separate relevant product
market than special access services that are not provisioned wholly over a carrier's own facilities. See SBC-AT&T
Order, 20 FCC Rcd at 18306, para. 26 n.89; Verizon-MCI Order, 20 FCC Rcd at 18448, para. 26 n.88.
56 This is also referred to as the "SSNIP Test" and is used to define relevant product and geographic antitrust
markets. See, e.g., SBC-AT&T Order, 20 FCC Rcd at 18307, para. 28; Verizon-MCI Order, 20 FCC Rcd at 18449 
50, para. 28.
9
Federal Communications Commission FCC 11-47
previously found, there are significant entry barriers to putting competitive last-mile facilities into
place.
57
17. In previous transactions in which an incumbent LEC has acquired a competitive LEC, the
Commission has identified competitive harm where both carriers provide service to a building over their
own facilities and there is no evidence that another competitive LEC is likely to connect the building to
its network.
58
To eliminate the possibility of such harm in Minneapolis and Olympia, CenturyLink has
committed not to increase rates for any service provided by CenturyLink or Qwest in the buildings
identified in Appendix C for seven years following the merger closing date.
59
This commitment extends
to both new and existing customers in those buildings, and it will cease to apply in a particular building
if the merged company divests either CenturyLink's or Qwest's legacy fiber facilities in that building, if
the number of competitive carriers with fiber facilities in the building returns to the level that existed
prior to the merger closing date, or if the Commission adopts comprehensive changes to its special
access rules requiring industry-wide changes to rates or rate structure for the services covered by this
commitment.
60
We conclude that this commitment is sufficient to mitigate potential competitive harms
resulting from this transaction. We therefore accept this commitment and make it a binding and
enforceable condition of our approval.
18. Finally, certain commenters claim that this merger could result in increased wholesale
special access prices, not as a result of a decrease in competition in any particular market area, but due to
the Applicants' different pricing policies and structures.
61
We decline to impose conditions related to
special access pricing in response to these particular claims, which are better addressed in the special
access rulemaking currently under consideration by the Commission.
62
Furthermore, even assuming that
57 See SBC-AT&T Order, 20 FCC Rcd at 18308-11, paras. 32, 39-40; Verizon-MCI Order, 20 FCC Rcd at 18451 
53, paras. 32, 39-40.
58 See, e.g., Application for Transfer ofControl ofOnFiber Communications, Inc. to Qwest Communications
Corporation, 21 FCC Rcd 9933, 9933 n.5 (2006); AT&T-BellSouth Order, 22 FCC Rcd at 5676-77, para. 27;
see also AT&T-BellSouth Order, 22 FCC Rcd at 5682-83, para. 42.
59 Appendix C, Commitment III.
6° Id. The Commission's special access proceeding is in WC Docket 05-25. See Special Access Ratesfor Price Cap
Local Exchange Carriers, WC Docket No. 05-25, Order and Notice of Proposed Rulemaking, 20 FCC Rcd 1994
(2005) (Special Access NPRM).
61 See Cox/Charter Comments at 26; Cbeyond et al. Comments at 43; Leap Comments at 2-4; Sprint Comments
at 4.
62 See Special Access NPRM, 20 FCC Rcd at 2004-34. Some commenters raise issues that are likewise better
addressed in a rulemaking of general applicability or are otherwise not specific to this transaction. See, e.g., Access
Point et al. Comments at 74-77 (access charge litigation); Cedar Falls Comments at 3-4 (local pole attachment
disputes); Pac-West Comments at 3-10 (ongoing intercarrier compensation litigation). The Shoshone-Bannock
Tribes have raised a number of issues relating to the quality of service provided by Qwest, the lack of affordable
high speed Internet, and inadequate documentation of Qwest's rights-of-way over the Fort Hall Reservation. Letters
from Nathan Small, Chairman, Shoshone-Bannock Tribes, to Julius Genachowski, Chairman, FCC, WC Docket
No. 10-110 (filed Jan. 26 and Mar. 2,2011). The Tribes' complaint concerning the inadequate documentation of
Qwest's purported rights-of-way is supported by the Superintendent of the Fort Hall Agency of the Bureau of Indian
Affairs who notes that "[a]mong the concerns are the lack of documentation, including land owner consents, [and]
proper recording." Letter from Dean Fox, Superintendent, Fort Hall Agency, Bureau of Indian Affairs, to Nathan
Small, Chairman, Shoshone-Bannock Tribes, WC Docket No. 10-110 (filed Mar. 2, 2011). CenturyLink has
committed to continuing to work with the Tribes to address their concerns and resolve outstanding issues once the
transaction has closed, and we expect them to do so. Letter from Karen Brinkmann and Alexander Maltas, Counsel
for CenturyLink, Inc., to Marlene H. Dortch, Secretary, FCC, WC Docket No. 10-110 (filed Feb. 4, 2011).
10
Federal Communications Commission FCC 11-47
there is sufficient evidence to SUppOlt a unilateral effect of increased wholesale special access pricing
resulting from the transaction, we believe that the voluntary commitments undertaken by CenturyLink
that relate to wholesale service, discussed below in Parts V.B and V.C, mitigate these concerns.
2. Potential Competition
19. Because certain CenturyLink wire centers abut Qwest wire centers in the transaction market
area, it is possible that the transaction may adversely affect potential competition for services offered by
the Applicants, including wholesale access, local exchange, interconnection, and broadband. However,
these adjacent service territories affect only about 13 percent of the exchanges involved in the
transaction and only approximately 1.7 million residential lines out of more than 17 million residential
and small business access lines that will be served by CenturyLink in the transaction market area after
closing.
63
Most of the adjacent exchanges, palticularly CenturyLink's, are small and rural.
64
We
recognize that carriers are generally less likely to compete in rural territories because of the high costs'of
reaching consumers and the relatively low potential revenues from less dense areas.
65
Furthermore, the
Applicants state that neither CenturyLink nor Qwest had plans to expand into the other company's
adjacent territories before the Merger Agreement was signed.
66
Nothing in the record contradicts this
assertion. Accordingly, given the limited number of adjacent wire centers and the rural nature of many
of these wire centers, we find it unlikely that the transaction will have an adverse effect on potential
competition.
B. Operations Support Systems and Wholesale Customer Service
20. Ensuring robust competition not only for American households but also for American
businesses requires particular attention to the role of wholesale communications markets, through which
providers of broadband and other services secure critical inputs from one another.
67
Well-functioning
wholesale markets can help foster retail competition, as it is not economically or practically feasible for
competitors to build facilities in all geographic areas. The Applicants have committed that the
transaction "will not cause any reduction, impairment, or discontinuance of service to any customer,"
including its wholesale customers, and in fact will result in a company that is better able to service its
wholesale customers.
68
We believe that the voluntary commitments discussed in this section will ensure
that wholesale competitors are not harmed by this transaction, and that the transaction serves the public
interest. We therefore accept these commitments and make them binding and enforceable conditions of
our approval.
63 See Letter from Karen Brinkmann and Alexander Maltas, Counsel for CenturyLink, Inc., to Marlene F. Dortch,
Secretary, FCC, WC Docket No. 10-110 at I (filed Mar. 1,2011) (CenturyLink Mar. 1,2011 Ex Parte Letter).
64 See Application, Exh. 5.
65 See Applications ofGTE Corp. and Bell Atlantic Corp., CC Docket No. 98-184, Memorandum Opinion and
Order, 15 FCC Rcd 14032, 14095, para. 117 (2000) (Bell Atlantic-GTE Order). Thus, here, each carrier's incentive
to encroach on the other's territories appears to be relatively small.
66 See Application at 28; id. Exh. 6, Declaration of Karen A. Puckett, para. 3; id. Exh. 7, Declaration ofTeresa A.
Taylor, para. 2.
67 See FCC, CONNECTING AMERICA: THE NATIONAL BROADBAND PLAN, at 42 (2010) (NATIONAL BROADBAND
PLAN).
68 Application at 37-38.
11
Federal Communications Commission FCC 11-47
21. Operations Support Systems (055). After closing, CenturyLink will operate its existing
OSS in its legacy territory.69 The Applicants stated that in the Qwest territories, Applicants would
maintain Qwest's OSS for at least one year after closing, during which time they would evaluate the best
approach for integrating the two companies' separate systems.
70
In response, commenters argue that
CenturyLink is obfuscating its plans for OSS integration, and worry that the wholesale OSS in the Qwest
territory will deteriorate under CenturyLink management.
71
Others claim that financial pressures and
efforts to meet stated synergy goals could encourage CenturyLink to sacrifice wholesale OSS integration
and performance in favor of other priorities.
72
Commenters also express concern that CenturyLink is
overextending itself in acquiring Qwest so soon after acquiring Embarq.73
22. In response to these concerns, CenturyLink has proposed a series of voluntary
commitments. Among other things, CenturyLink has committed to keep Qwest's OSS in place for 30
months after closing, and to provide the Commission and the relevant state commissions with a
transition plan at least 180 days before transitioning from Qwest's OSS to CenturyLink's OSS or any
other new systems.
74
CenturyLink also agrees to report to the Commission, on a quarterly basis, a series
of OSS performance metrics designed to ensure an adequate level of OSS performance in the legacy
Qwest territory after closing.
75
These commitments will allow the Commission to monitor
CenturyLink's OSS performance and ensure that service quality in the legacy Qwest territory does not
deteriorate as a result of this transaction, and to take appropriate enforcement action if it does.
76
Accordingly, we find that CenturyLink's commitments are sufficient to mitigate potential harms relating
to OSS; we therefore accept the commitments in Appendix C and make them binding and enforceable
d
· . f 1
77
con ItlOns 0 our approva .
69 CenturyLink is currently transitioning to the EASE ass as a result of its merger with Embarq. See CenturyTel 
Embarq Order, 24 FCC Rcd at 8768, App. C.
70 Applicants' Reply at 20-21. Subsequently, in settlements filed in at least 8 states, Applicants agreed to maintain
Qwest's ass in the Qwest territories for at least 24 months. See, e.g., Letter from Karen Brinkmann and Alexander
Maltas, Counsel for CenturyLink, Inc., to Marlene F. Dortch, Secretary, FCC, WC Docket No. 10-110, Exh. B 
Integra Settlement Agreement, para. 12 (filed Nov. 8,2010) (Integra Settlement); Iowa Utils. Bd. Order at 20.
71 Access Point et at. Comments at 7-11; Cbeyond et al. Comments at 7-8; NJDRC Reply at ii (arguing that
CenturyLink has insufficient expertise and experience to operate Qwest's ass, which could lead to significant
harms to competitive LECs before CenturyLink learns to operate the ass adequately).
72 See Cbeyond et at. Comments at 44,47.
73 See Access Point et at. Comments at 67; NASUCA Comments at 2-3; NJDRC Comments at 16; NASUCA Reply
at 2; NJDRC Reply at ii, 11-12; Letter from Thomas Jones, Counsel for Cbeyond, Inc., Integra Telecom, Inc.,
Socket Telecom, LLC, and tw telecom inc, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 10-110, Attach.
at 7-9 (filed Sept. 24, 2010) (Cbeyond et al. Sept. 24,2010 Ex Parte Letter).
74 See Appendix C, Commitments IV.A.I, IV.A.2, IV.A.3.
75 See Appendix C, Commitment IV.B.
76 We note that the ass in legacy Qwest territory will continue to be subject to the terms of Qwest's section 271
approvals. See infra paras. 26-27.
77 We note that CenturyLink has made similar commitments in settlements with competitive LECs and in some of
the state proceedings. See, e.g., Integra Settlement, supra note 70, at 9 (stating that the merged company commits to
use the legacy Qwest ass for at least two years, or until July 1,2013, whichever is later, and that it will prepare an
ass transition plan at least 270 days before replacing or integrating Qwest's aSS).
12
Federal Communications Commission FCC 11-47
23. Interconnection Agreements. Some commenters express concern that, post-closing,
CenturyLink will "discontinue Qwest [interconnection agreements] wherever possible,,,78 and that
CenturyLink has not committed to retain these interconnection agreements for any time period.
79
They
also contend that renegotiating these interconnection agreements will "deprive competitors of the benefit
of their enormous investment in time and resources to develop and maintain interconnection agreements
and associated processes in the legacy Qwest region,,,8o especially given that CenturyLink has suggested
that existing interconnection agreements will not be used as a starting point for negotiating replacement
interconnection agreements.
81
24. CenturyLink has offered a number of commitments designed to mitigate concerns raised in
the record about interconnection agreements. Pursuant to the Merger Agreement, CenturyLink will
assume all of Qwest's existing contractual commitments, including its interconnection agreements.
82
In
addition, CenturyLink has committed to allow any competitive LEC to use its current interconnection
agreement as the starting point for renewal contract negotiations,83 and to extend its current agreement for
up to 36 months.
84
CenturyLink has also committed to permit competitive LECs to negotiate multiple
interconnection agreements within a state in a single negotiation.
85
Finally, CenturyLink has committed
not to oppose the enforcement and arbitration by a state commission of interconnection agreements that are
subject to the terms of this order.
86
We accept the commitments in Appendix C and make them binding
and enforceable conditions of our approval.
87
25. Other Wholesale Service Issues. Some commenters argue that the merged company will have
incentives to reduce wholesale service quality in order to achieve synergies.
88
To address this concern, and
consistent with its assertion that the transaction will benefit Qwest and CenturyLink wholesale
customers,89 CenturyLink has committed not to discontinue any Qwest interstate wholesale services for
78 Cbeyond et a!. Sept. 24, 2010 Ex Parte Letter, Attach. at 4; see also Access Point et al. Comments at 72-73;
Pac-West Comments at 10-14.
79 See Cbeyond et al. Sept. 24,2010 Ex Parte Letter, Attach. at 3-4. Cbeyond eta!. are also concerned about the
prospect ofCenturyLink renegotiating interconnection agreements that are nearing expiration. Id.
80 Id. at 4 (quoting Applicants' Reply at 33); see also Infotelecom Comments at 2-6.
81 Cbeyond et a!. Sept. 24, 2010 Ex Parte Letter, Attach. at 4 (citing Applicants' Reply at 33).
82 Application at 37.
83 See Appendix C, Commitment IV.H.
84 See id., Commitment IV.G. Interconnection agreements that were extended by operation of the CenturyTel 
Embarq Order are exempt from this commitment. Id.; see also CenturyTel-Embarq Order, 24 FCC Rcd at 8770,
App. C.
85 See Appendix C, Commitment IV.1.
86 See Appendix C, Commitment IV.J.
87 We note that CenturyLink has made similar commitments in settlements with competitive LECs and in some of
the state proceedings. See, e.g., Integra Settlement, supra note 70, at 5 (stating that the merged company will allow
a competitive LEC to use its existing interconnection agreement as the basis for negotiating an initial successor
replacement agreement); Washington UTC Order at 132 (requiring the merged company to extend existing
interconnection agreements for three years).
88 See, e.g., Joint Commenter Comments at 44-48.
89 See Application at 37-38.
13
Federal Communications Commission FCC 11-47
one year after the transaction closing date.
90
CenturyLink has also committed not to seek to recover costs
associated with this transaction through increases in wholesale service rates.
91
Finally, CenturyLink has
committed that both in the legacy Qwest territory and the legacy CenturyLink territory, it will not assert
that it is exempt from section 251(c) obligations pursuant to section 251 (f)(l).92 We believe these
commitments are sufficient to mitigate the potential wholesale service harms raised in the record, and will
help ensure that the combined entity provides an appropriate level of service to its wholesale customers.
We therefore accept the commitments in Appendix C and make them binding and enforceable conditions
of our approval.93
C. Other Issues
26. Regulatory Status ojCenturyLink. Some commenters question whether post-merger
CenturyLink will be able to meet a variety of obligations under Sections 251 and 271, arguing that
CenturyLink does not have experience complying with Performance Assurance Plans (PAPs); has never
been required to establish a Change Management Process (CMP); and has no experience complying with
wholesale service performance measurement reporting or otherwise holding itself accountable in the ways
Qwest-which is a Bell Operating Company (BOC)-is required to.
94
Commenters further assert that the
Commission and competitive LECs will be unable to detect whether post-merger CenturyLink is failing to
meet its section 271 obligations.
95
CenturyLink responds that, though it has not previously operated
subject to the requirements of Section 271, "it is fully aware of (and has acknowledged) its duty to do so
within Qwest's in-region service areas, and the company will ensure that the resources and expertise
required to meet those obligations are in place." 96 It further asserts that "all rights that competitive LECs
enjoy under Sections 251 or 271 will be unaffected by the merger," and that it intends to meet all of its
legal obligations.
97
27. We conclude that CenturyLink's commitment to meet its new BOC obligations in the
legacy Qwest region, taken in combination with the authority vested in this Commission and the states,
adequately addresses commenters' concerns. CenturyLink will be a BOC in the legacy Qwest territory
following this transaction. Section 3(4) of the Act defines a BOC as either one of a group of specifically
90 See Appendix C, Commitment IV.E; see also, e.g., Cbeyond et al. Comments at 42 & Attach. C at 4.
91 See Appendix C, Commitment IV.L; see also, e.g., Cbeyond et al. Comments at 71-72 & Attach. C at 4.
92 See Appendix C, Commitment IV.K. Commenters argue that section 251(f)(1) is not intended to shield the
third-largest incumbent LEC in the United States from meeting its obligations under section 251(c). See, e.g.,
Cox/Charter Comments at 16-22; Letter from Howard J. Symons, Counsel for Cablevision Systems, Inc., to
Marlene H. Dortch, Secretary, FCC, WC Docket No. 10-110, Attach. at 4 (filed Mar. 2, 2011); see also Cbeyond
et al. Comments at 35 n.112.
93 We note that CenturyLink has made similar commitments in settlements with competitive LECs and in some of
the state proceedings. See, e.g., Integra Settlement, supra note 70, at 2 (stating that the merged company will not
seek to recover transaction-related costs through wholesale service rates or other fees paid by competitive LECs);
Arizona Corp. Comm'n Order at 50 (noting CenturyLink's commitment that it will not seek to avoid any of its
obligations based on the rural exemption provisions of the Act).
94 Access Point et at. Comments at 9-11, 67; Cox/Charter Comments at 19-22 (seeking to condition the merger on
assurances that CenturyLink will maintain adequate staff at its wholesale order support centers); Cbeyond et at.
Comments at 7-26,44-48; Cbeyond et at. Sept. 24,2010 Ex Parte Letter, Attach. at 1-3,4-5,7-9.
95 COMPTEL Comments at 10-13; Cbeyond et at. Comments at 33-34.
96 Applicants' Reply at 14.
97
I
d. at 22.
14
Federal Communications Commission FCC 11-47
listed companies-including US West Communications Company-or as "any successor or assign of
any such company that provides wireline telephone exchange service.,,98 Consistent with this definition
and with Commission precedent, we determine that CenturyLink is a successor to the former U S West
Communications Company and is therefore responsible for all obligations that apply to BOCs under the
Act in the former U S West Communications Company territories.
99
In the legacy Qwest territory, post 
merger CenturyLink will be subject to all state and federal obligations-and all applicable remedies for
violation of those obligations-that Qwest was subject to due to its BOC status.
28. Big Footprint. Consistent with the "Big Footprint" theory that the Commission addressed
in prior BOC mergers,100 we find thatthe significant increase in the size of CenturyLink's study area
resulting from the transaction could, in theory, increase its incentive to engage in anticompetitive
activity,101 although we think it is likely to have a somewhat lesser effect in the instant case than in the
prior BOC mergers due to the size of the applicants.
102
Additionally, to the extent that CenturyLink has
been less willing to cooperate with competitors than Qwest,103 CenturyLink may extend this behavior to
the acquired territories following the transaction. 104 In order to address these potential harms, the
Applicants have proposed a series of voluntary commitments, including in particular commitments
relating to their wholesale operations that will, for example, ensure that quality OSS is maintained;
ensure that competitive LECs maintain access to existing services after the merger; and facilitate the
negotiation of interconnection agreements, including by ensuring that CenturyLink does not rely on the
exemption from interconnection obligations in section 251 (f)(l).105 We find that these commitments,
98 47 U.S.c. § 153(4). US West Communications Company is now part of Qwest, and the exchanges at issue in this
proceeding were part of the US West Communications Company. See Qwest Communications International Inc.
and US West, Inc. Applications for Transfer ofControl ofDomestic and International Sections 214 and 310
Authorizations and Applications to Transfer Control ofa Submarine Cable Landing License, CC Docket No.
99-272, Memorandum Opinion and Order, 15 FCC Rcd 11909 (2000).
99 See Applications Filed for the Transfer ofCertain Spectrum Licenses and Section 214 Authorizations in the States
ofMaine, New Hampshire, and Vermont from Verizon Communications 1nc. and its Subsidiaries to FairPoint
Communications, Inc., WC Docket No. 07-22, Memorandum Opinion and Order, 23 FCC Rcd 514, 533-37, paras.
33-37 (2008) (assigning BOC status to FairPoint with respect to exchanges it acquired from Verizon).
100 See Applications ofAmeritech Corp., Transferor, and SBC Communications, Inc., Transferee, 14 FCC Rcd
14712,14797-98, paras. 192-93 (1999) (SBC-Ameritech Order); see also AT&T-BellSouth Order, 22 FCC Rcd at
5751-53, paras. 183-85; Bell Atlantic-GTE Order, 15 FCC Rcd at 14115-16, paras. 176-78.
101 See COMPTEL Comments at 3-5; Cbeyond et al. Comments at 49-54; Sprint Reply at 3-5.
102 As the Commission explained in the SBC-Ameritech Order, a merger between two incumbent LECs may increase
the merged entity's incentive to engage in anticompetitive behavior by allowing the resulting entity to capture or
internalize a higher proportion of the benefits of such anticompetitive strategies against regional or national
competitors. See SBC-Ameritech Order, 14 FCC Rcd at 14798, para. 193. The larger the resulting incumbent LEC,
the greater its ability to internalize these spillover effects. Access Point et al. argue that the diminished potential
competition posed by this merger is more severe than that posed by the SBC-Ameritech and Bell Atlantic-GTE
mergers. See Access Point et al. Comments at 16; see also COMPTEL Comments at 4; Sprint Reply at 2-3. But see
Mabuhay Comments at 1 (noting that even post-merger, the applicants' resulting company will comprise less than
20 percent of the overalliandline market). We find that CenturyLink's voluntary commitments alleviate any
concerns regarding CenturyLink's ability to act anticompetitively due to its increased footprint.
103 See, e.g., Cedar Falls Comments at 1-3; Cbeyond et al. Comments at 43,47-54; New Edge Reply at 10; Sprint
Reply at 4; Cbeyond et al. Sept. 24, 2010 Ex Parte Letter, Attach. at 1.
104 See SBC-Ameritech Order, 14 FCC Rcd at 14950, para. 571.
105 See supra paras. 22-25.
15
Federal Communications Commission FCC 11-47
summarized above and included in Appendix C, adequately address both of these concerns. We
therefore accept these voluntary commitments and make them binding and enforceable conditions of our
approval.
29. Benchmarking. Some commenters argue that the merged company will have a greater
ability to discriminate against its competitors because the merger will reduce the number of similarly
situated companies against which it will be possible to compare, or "benchmark," practices. lOG However,
the Commission has previously explained that benchmarking in this particular context has, at best,
limited value.
107
Accordingly, we do not find that the elimination of a company for benchmarking
purposes presents a significant harm.
VI. POTENTIAL PUBLIC INTEREST BENEFITS
30. We next consider whether the transaction is likely to generate verifiable, transaction 
specific public interest benefits.lOS In doing so, we ask whether post-transaction CenturyLink will be
able and is likely to pursue business strategies resulting in demonstrable and verifiable benefits that
would not be pursued but for the transaction.
109
As discussed below, we find that the proposed
transaction is likely to generate significant transaction-specific public interest benefits.
A. Analytical Framework
31. In determining whether approval of a transaction is in the public interest, the Commission
evaluates whether the transaction is likely to produce public interest benefits. The Commission applies
several criteria in deciding whether a claimed benefit should be considered and weighed against potential
harms. First, the claimed benefit must be transaction specific. That is, the claimed benefit must be likely
to occur as a result of the transaction but unlikely to be realized by other practical means having fewer
anticompetitive effects. Second, the claimed benefit must be verifiable.
llo
The Applicants, who possess
much of the information relating to the potential benefit of a transaction, are required to provide sufficient
supporting evidence to permit us to verify the likelihood and magnitude of each claimed benefit.
lll
Benefits expected to occur only in the distant future are inherently more speculative than more immediate
benefits. Third, the Commission calculates the magnitude of benefits net of the cost of achieving them.
112
106 See Access Point et al. Comments at 23-28; Cbeyond et al. Comments at 61-66; NJDRC Comments at 7-8.
107 AT&T-BellSouth Order, 22 FCC Rcd at 5755, para. 189 ("[B]enchmarking does not represent as useful or
important a regulatory tool as the Commission previously believed.... [Given the comprehensive performance
plans and numerous specific metrics applied to BOCs under the 1996 Act, t]he performance of other companies is
not germane to the question of whether the performance of the company under scrutiny is improving, deteriorating,
or staying the same.").
108 See, e.g., AT&T-BellSouth Order, 22 FCC Rcd at 5760, para. 200; WorldCom-MCIOrder, 13 FCC Rcd at
18134-35, para. 194.
109 See, e.g., Verizon Communications, Inc. and America M6vil, S.A. de C. V., Application for Authority to Transfer
Control ofTelecomunicaciones de Puerto Rico, Inc., WT Docket No. 06-113, Memorandum Opinion and Order and
Declaratory Ruling, 22 FCC Red 6195, 6210, para. 34 (2007); SBC-Ameritech Order, 14 FCC Red at 14825, para.
255.
110 News Corp.-Hughes Order, 19 FCC Red at 610, para. 317; EchoStar-DirecTV Order, 17 FCC Red at 20630,
paras. 189-90.
III News Corp.-Hughes Order, 19 FCC Red at 610, para. 317; EchoStar-DirecTV Order, 17 FCC Red at 20630,
para. 190.
112
1
d.
16
Federal Communications Commission FCC 11-47
Fourth, the benefits must flow through to consumers, and not inure solely to the benefit of the
company.l13
32. The Commission applies a "sliding scale approach" to its ultimate evaluation of benefit
claims. Where potential harms appear both substantial and likely, the Applicants' demonstration of
claimed benefits must reveal a higher degree of magnitude and likelihood than the Commission would
otherwise demand.
1l4
On the other hand, where potential harms appear less likely and less substantial,
we will accept a lesser showing. I 15
B. Analysis
33. The Applicants claim that the transaction will likely result in benefits in four principal
areas: increased availability of broadband and IPTV; increased competition for enterprise and
government customers; an increased focus on local communities and rural customers; and synergies of
more than $575 million annually. While we do not accept all of the Applicants' claims or their exact
quantification of benefits, we do agree that the transaction is likely to result in significant benefits to
consumers. The voluntary commitments described below, which we accept and make binding and
enforceable conditions of our approval, will help ensure that this transaction serves the public interest.
34. Broadband Deployment and Adoption. The Applicants claim that this transaction will lead
to improved and expanded access to broadband in the transaction market area.
116
The Application states
that Qwest, which serves approximately 3 million broadband customers,1I7 has deployed broadband
capability to approximately 86 percent of the living units passed in the transaction market areas, with
more than 14 million living units qualified at 1.5 Mbps or greater, and more than 8 million living units
qualified at 5 Mbps or greater.
1l8
The Application states that CenturyLink has enabled nearly 6 million
access lines for broadband-89 percent of its total access lines
1l9
-with more than 4.3 million of these
lines enabled at speeds of 3 Mbps or greater, approximately 3.9 million lines at speeds of 6 Mbps or
greater, and more than 2.7 million lines at speeds of 10 Mbps or greater.
120
113 Application ofWestern Wireless Corp. and ALLTEL Corp. for Consent to Transfer Control ofLicenses and
Authorizations, 20 FCC Rcd 13053, 13100, para. 132 (2005).
114 News Corp.-Hughes Order, 19 FCC Rcd at 611, para. 318; SBC-Ameritech Order, 14 FCC Rcd at 14825,
para. 256.
lIS AT&T-BellSouth Order, 22 FCC Rcd at 5762, para. 203.
116 Application at 13-15.
117 Id. at 4.
118 Id. at 13. Qwest defines living units to include any distinct address in its Loop Facilities Assignment and Control
System inventory where Qwest has provided or plans to provide service, including homes, apartments, and
businesses. Id. at 13 n.20.
119Id. at 13.
12° Id. CenturyLink further states that it is on target to meet or exceed each of the broadband commitments that it
undertook as part of its acquisition of Embarq. Letter from Karen Brinkmann, Counsel for CenturyLink, Inc., to
Marlene F. Dortch, Secretary, FCC, WC Docket No. 10-110 at 1 (filed Oct. 4, 2010) (CenturyLink Oct. 4 Ex Parte
Letter); Application at 9-10. Those commitments encompassed offering broadband service to 100% of the merged
company's retail single-line residential and single-line business access lines within three years of closing, with the
following interim benchmarks for download speeds: 1.5 Mbps to 87% of the eligible lines within two years; 3 Mbps
to 75% of lines within one year; 3 Mbps to 78% of lines within two years; and 3 Mbps to 80% of the eligible lines
within three years. See CenturyTel-Embarq Order, 24 FCC Rcd at 8771, App. C.
17
Federal Communications Commission FCC 11-47
35. In this proceeding, the Applicants have made commitments to expand broadband
deployment to unserved areas, including rural communities, and to facilitate increased broadband
adoption by low-income households. With respect to deployment, within seven years of the transaction
closing date, CenturyLink will make available broadband service at an actual download speed of at least
4 Mbps to at least 4 million Qwest customers that do not currently have access to such service from
Qwest.
121
In addition, at least 75 percent of those 4 million customers will also have access to an actual
upload speed of at least 1 Mbps.l22 By the end of the seven-year buildout period, broadband service at
speeds of at least 12 Mbps or higher downstream will be made available to more than twice as many
Qwest customers as have access to such speeds today.123 CenturyLink commits to meet interim
deployment benchmarks, and to provide the Commission with regular reports on its progress in meeting
its deployment commitments.
124
These commitments are consistent with the Applicants' asserted benefit
of expanding broadband to more customers; accordingly, we accept the broadband deployment
commitments in Appendix C and make them binding and enforceable conditions of our approval.
I25
36. To encourage broadband adoption throughout the merged company's territory, CenturyLink
has committed to make discounted broadband Internet access service available to households that qualify
for Lifeline service and meet certain other eligibility criteria, offering a service with 1.5 Mbps
downstream capability to eligible customers at an initial rate of $9.95 per month, with comparable
discounts for higher-speed services.
'26
CenturyLink will offer discounted computer equipment to
customers who subscribe to one of these discounted broadband services.
'27
In conjunction with this
broadband adoption program, CenturyLink has committed to institute a broadband promotion, education,
and training program, and to make data about the adoption program and its results public to facilitate
analysis of the effectiveness of these programs.
128
These commitments are consistent with the
Applicants' asserted benefit of expanding broadband to more customers; accordingly, we accept the
commitments in Appendix C and make them binding and enforceable conditions of our approval.
37. CenturyLink's broadband deployment and adoption commitments constitute public interest
benefits. We emphasize that these voluntary commitments rely on private investment, and do not rely on
public funding sources such as universal service support. This type of private-sector investment in
broadband, and the competition it will promote among providers, is critical to ensuring a healthy and
innovative broadband ecosystem and to encouraging new products and services that benefit American
consumers and businesses of every size. These commitments are consistent with the Applicants'
asserted benefit of focusing on local communities and rural customers; accordingly, we accept these
commitments and make them binding and enforceable conditions of our approval.
121 See Appendix C, Commitment I & n.3.
122 See id., Commitment L
123 See id.
124 See id.
125 We note that some of the state commissions that have approved this transaction imposed broadband deployment
conditions as well. See, e.g., Washington UTe Order at 122-23 (requiring an investment of $80 million in
broadband infrastructure in Washington over five years); Iowa Utils. Bd. Order at 13-14 (requiring an investment of
at least $25 million in broadband infrastructure in Iowa over five years).
126 See id., Commitment ILA. Where 1.5 Mbps service is unavailable, CenturyLink will offer 768 kbps downstream
capability instead. Id. & n.7.
127 See id., Commitment II.B.
128 See id., Commitments II.C, ILD, II.E, II.F, II.G.
18
Federal Communications Commission FCC 11-47
38. Increased Competition for Multichannel Video Services. Applicants assert that the
transaction will result in more rapid deployment of IPTV services and will position post-merger
CenturyLink to be a stronger competitor to cable companies for the provision of multichannel video
services and the triple play of voice, video, and Internet services.
129
Applicants further assert that the
provision of bundled services will provide an important source of broadband revenue and will help
reduce customer churn, which should allow post-merger CenturyLink to increase broadband investment
and deployment.
l3O
Commenters are skeptical of CenturyLink's commitment to IPTV, noting that
similar promises were made in the CenturyTellEmbarq merger, yet CenturyLink's IPTV service remains
limited to three markets, none of which are in the former Embarq territories.
131
In response, Applicants
assert that CenturyLink has already made significant progress in deploying IPTV on a commercial basis
in several additional markets and will continue to do so.132
39. We conclude that CenturyLink is more likely to expand IPTV service in the legacy Qwest
territory than Qwest would have been absent the transaction. To date, Qwest has relied on its marketing
relationship with DirecTV to offer satellite video service to its customers, and has had no plans to
provide IPTV services or otherwise expand its facilities-based video offerings.
133
In addition, we agree
that an increased ability to provide voice, data, and video packages is likely to make the merged
company a stronger company overall, and a stronger competitor in the multichannel video service
market. We therefore find that the potential for increased IPTV competition in the former Qwest
territory is a legitimate public interest benefit of this transaction. In order to keep the Commission
apprised of its progress in deploying IPTV, CenturyLink has committed to file FCC Form 325 for all of
its IPTV deployments for the three reporting cycles following consummation of the proposed
transaction.
134
We accept this commitment and make it a binding and enforceable condition of our
approval.
40. Increased Competition for Enterprise and Government Customers. With respect to
enterprise and government broadband markets, Applicants assert that the transaction will give post 
merger CenturyLink an enhanced position in these markets, enabling it to compete on a national scale
against large providers serving such customers.
135
Commenters argue that Applicants fail to include
concrete or verifiable commitments, and fail to identify specific merger-related benefits.
l36
While post 
merger CenturyLink may improve its competitive potential in the enterprise and government broadband
markets, we are not fully convinced that this will amount to a significant public interest benefit. We
find, however, that the other public interest benefits discussed herein, taken in combination with the
Applicants' voluntary commitments, are sufficient to justify approval of the transaction.
41. Focus on Local Communities and Rural Customers. The Applicants assert that post-merger
CenturyLink will continue to focus on local communities and rural customers, and that the merger will
facilitate the combined company's efforts to do so while rolling out innovative products and services to
129 Application at 2, 11, 15-18.
130 [d. at 11,16-17, n.27.
131 See, e.g., Access Point et al. Comments at 36-37; Cbeyond et al. Comments at 67-68.
132 See, e.g., Application at 15-16; id. Exh. 6, Declaration of Karen A. Puckett, para. 4; Applicants' Reply at 4-5.
133 Application Exh. 7, Declaration of Teresa A. Taylor, para. 3.
134 See Appendix C, Commitment VI.
135 Application at 11, 18-19.
136 See, e.g., Access Point et al. Comments at 32-42; NJDRC Reply at 3-6.
19
Federal Communications Commission FCC 11-47
all customers.
137
Commenters argue that Applicants offer no evidence in support of this claimed public
interest benefit, and that it is not a merger-specific benefit in any event.
138
In response, the Applicants
note that combining the companies' fiber backbone networks will place more rural communities within
economically feasible reach of that network, enabling the combined entity to more rapidly deploy
advanced broadband capabilities to rural customers in both CenturyLink and Qwest communities.
139
As
discussed above, the Applicants' promise to continue and expand their focus on local communities and
rural customers, along with their voluntary commitments to expand broadband deployment and increase
broadband adoption, will help ensure that this transaction benefits rural consumers, and provide
significant public interest benefits.
42. Synergies. The Applicants claim that this transaction will create significant annual
operating synergies of approximately $575 million, which are expected to be fully realized three to five
years following the close of this transaction.
140
CenturyLink also estimates that it will save an additional
$50 million in annual capital expenditures within two years of closing.
141
Some of these synergies will
be realized by paying for fewer off-network terminations and handoffs, due to post-merger
CenturyLink's larger footprint. 142 .Some commenters fear that these synergies may come by cutting
critical staff support and/or wholesale service quality.143 Based on the record evidence, we do not fully
accept the Applicants' claims of operating and capital expenditure savings. We conclude, however, that
even if the claimed synergies are not fully realized, the other public interest benefits discussed herein,
taken in combination with the Applicants' voluntary commitments, are substantial enough to justify
approval of this transaction. Furthermore, the voluntary commitments that CenturyLink has undertaken
will help ensure that the financial benefits of this transaction flow through to CenturyLink's wholesale
and retail customers.
l44
43. Universal Service. In order to ensure that this transaction is in the public interest,
CenturyLink has made commitments to help ensure that the federal universal service support the merged
company receives is consistent with the size of the merged company. First, CenturyLink has committed
137 Application at 19-21; Applicants' Reply at 8-9.
138 See, e.g., Access Point et al. Comments at 3, 39-40 ("By definition, if the result of the merger is that Applicants
will 'continue' what they are doing prior to the merger, such 'continuation' cannot be deemed a merger-specific
benefit. Applicants do not allege that absent the merger they would abandon their current focus on local consumers
and rural communities.").
139 Application at 20-21; Applicants' Reply at 8-9.
140 Application at 21.
141Id.
142Id. CenturyLink claims that other synergies will come from "reduced corporate overhead, elimination of
duplicate functions, enhanced revenue opportunities, and increased operational efficiencies through the adoption of
each company's most effective practices," as well as by leveraging "product development, system investment, and
advertising costs over a broader customer and revenue base." Id. at 21-22.
143 See, e.g., Cbeyond et al. Comments at 44,47,69-70; NJDRC Reply at ii. Access Point et al. dispute that
synergies are a public benefit and notes that the Commission has recognized that synergies can create harms.
Access Point et al. Comments at 6, 40. Access Point et al. further state that the Applicants have provided no
meaningful support or documentation for their claims that the merged entity will achieve the purported $575 million
in merger-related synergies, nor do the Applicants offer any commitment to share any such cost savings with retail
or wholesale customers. Id. at 40-41.
144 See supra paras. 22-25.
20
Federal Communications Commission FCC 11-47
to phase out local switching support (LSS) over two years, beginning January 1,2012.
145
LSS was
originally created to help small telephone companies that lack economies of scale afford large
mechanical switches.
146
Second, CenturyLink has committed to forgo federal safety net additive support
for calendar year 2012 and all subsequent years. 147 Safety net additive is intended to encourage
investment, generally by smaller carriers.
148
Finally, CenturyLink has committed to freeze interstate
common line support (ICLS) on a per-line basis for its three remaining average schedule companies,
effective January 1,2012, and to work with the National Exchange Carrier Association (NECA) and the
Commission to determine whether conversion to price caps is more appropriate.
149
ICLS typically
supports smaller "rate-of-return" carriers and is uncapped. 150 Given that CenturyLink will be the
third-largest incumbent LEC in the United States upon consummation of the proposed transaction, we
believe that CenturyLink's voluntary commitments are in the public interest and are consistent with the
Commission's comprehensive universal service reform efforts. We therefore accept the commitments in
Appendix C and make them binding and enforceable conditions of our approval.
VII. ORDERING CLAUSES
44. Accordingly, IT IS ORDERED, pursuant to sections 4(i) and (j), 214, 309, and 31O(d) of
the Communications Act of 1934, as amended, 47 U.S.c. §§ 154(i), (j), 214, 309, 31O(d), that the
applications filed by Qwest Communications International Inc. and CenturyTel, Inc. d/b/a CenturyLink
for the transfer of control of the domestic section 214 authorizations set forth in Appendix B and for the
assignment and transfer of control of licenses and international section 214 authorizations set forth in
Appendix B ARE GRANTED.
45. IT IS FURTHER ORDERED that, as a condition of this grant and pursuant to section
214(c) of the Communications Act of 1934, as amended, 47 U.S.c. § 214(c), CenturyTel, Inc. d/b/a
CenturyLink shall comply with the conditions set forth in Appendix C of this Order.
46. IT IS FURTHER ORDERED that the above grant shall include authority for Qwest
Communications International Inc. and CenturyTel, Inc. to acquire control of: (a) any license or
authorization issued to Qwest Communications International Inc. and Century Tel, Inc. and their
subsidiaries during the Commission's consideration of the transfer of control applications or the period
required for consummation of the transaction following approval; (b) construction permits held by such
145 See Appendix C, Commitment V.A. This commitment will remain in force until the Commission adopts new
rules governing LSS, at which time CenturyLink will be subject to those rules and will no longer be bound by the
terms of this commitment.
146 See Connect America Fund, WC Docket No. 10-90, A National Broadband Plan for Our Future, GN Docket No.
09-51, Establishing Just and Reasonable Rates for Local Exchange Carriers, WC Docket No. 07-135, High-Cost
Universal Service Support, WC Docket No. 05-337, Developing a Unified Intercarrier Compensation Regime, CC
Docket No. 01-92, Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Lifeline and Link-Up,
WC Docket No. 03-109, Notice of Proposed Rulemaking and Further Notice of Proposed Rulemaking, FCC 11-13,
paras. 21,168, 187 (reI. Feb. 9, 2011) (USF-ICC Transformation NPRM).
147 See Appendix C, Commitment V.B.
148 USF-ICC Transformation NPRM, para. 183. We also note that CenturyLink has qualified for safety net additive
support on the basis of line loss, rather than significant increased investment, which was not the intent of that rule.
Id. at para. 184.
149 See Appendix C, Commitment V.c.
150 USF-ICC Transformation NPRM, para. 169.
21
Federal Communications Commission FCC 11-47
licensees that mature into licenses after closing; and (c) applications filed by such licensees and that are
pending at the time of consummation of the proposed transfer of control.
47. IT IS FURTHER ORDERED that, pursuant to section 1.103 of the Commission's rules,
47 c.F.R. § 1.103, this Memorandum Opinion and Order IS EFFECTIVE upon release.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
22
Federal Communications Commission
APPENDIX A
List of Commenters
Comments
FCC 11-47
Comments Abbreviation
Access Point, Covad, Deltacom, Granite, HickoryTech, Access Point et al.
MetTel, OrbitCom, PAETEC, TelePacific
Communications
ADTRAN, Inc. ADTRAN
Aventure Communications Technology, LLC and Aventure
Northern Valley Communications, LLC
Broadvox-CLEC, LLC (filed as Anita Taff-Rice) Broadvox
Cbeyond, Integra Telecom, Socket Telecom, tw telecom Cbeyond et al.
Cedar Falls Utilities Cedar Falls
Communications Workers of America CWA
COMPTEL COMPTEL
Cox Communications & Charter Communications . Cox/Charter
Infotelecom, LLC (filed as Anita Taff-Rice) Infotelecom
Leap Wireless International, Inc. Leap
Mabuhay Alliance (filed as Aaron Lewis) Mabuhay
National Association of State Utility Consumer Advocates NASUCA
New Jersey Division of Rate Counsel NJDRC
Pac-West Telecomm, Inc. Pac-West
Sprint Nextel Corporation Sprint
Reply Comments
ReDlv Comments Abbreviation
CenturyLink, Inc. and Qwest Communications Applicants'Reply
International Inc.
Independent Telephone & Telecommunications Alliance ITTAReply
Level 3 Communications LLC Level 3 Reply
National Association of State Utility Consumer Advocates NASUCA Reply
New Edge Network, Inc. New Edge Reply
New Jersey Division of Rate Counsel NJDRCReply
Sprint Nextel Corporation Sprint Replv
23
Federal Communications Commission
APPENDIXB
List of Licenses and Authorizations
Subject to Transfer of Control
Domestic Section 214 Authorizations
FCC 11-47
File No.
See WC Docket No. 10-110
Authorization Holder
EI Paso County Telephone Company
Qwest Communications Company, LLC
Qwest Corporation
Qwest Communications Corporation of Virginia
Qwest LD Corp.
International Section 214Authorizations
File No.
ITC-TIC-20100510-00183
ITC-T/C-20100511-00188
ITC-T/C-20100511-00190
Authorization Holder
Qwest Communications Company, LLC
Qwest LD Corp.
Qwest Services Corporation
Authorization Number
ITC-214-19930315-00261
ITC-214-19960215-00016
ITC-214-19940829-00393
ITC-214-19960916-00448
ITC-214-20030117-00022
ITC-214-20021009-00495
ITC-214-19971031-00673
Cable Landing License Authorization
File No.
SCL-T/C-201 0051 0-00012
Section 310(d) Authorizations
File No.
0004229927
0004231340
0004231345
0004231348
0004232216
0004236172
Authorization Holder
Qwest Communications Company, LLC
Licensee
Qwest Corporation
Qwest Communications International Inc.
Qwest Communications Company, LLC
EI Paso County Telephone Company
Qwest Learning and Conference Center
Qwest Government Services
24
Authorization Number
SCL-LIC-19981117-00025
Lead Call Sign
KAC80
WQKZ336
WLS557
KNGF367
WQGX649
WQIG458
Federal Communications Commission
APPENDIXC
CenturyLink Commitments
FCC 11-47
The Applicants have offered certain voluntary commitments, enumerated below. Because we
find these commitments will serve the public interest, we accept them as conditions of our approval.
Unless otherwise specified herein, these commitments are effective as of the Transaction Closing Date,
which is defined for these purposes as the date on which the Applicants consummate the proposed
transaction approved herein. The commitments described herein shall be null and void if CenturyLink
and Qwest do not consummate the proposed transaction and there is no Transaction Closing Date. Unless
otherwise specified herein, these commitments will expire three years from the Transaction Closing Date.
It is not the intent of these commitments to restrict, supersede, or otherwise alter state or local
jurisdiction under the Communications Act of 1934, as amended, or over the matters addressed in these
commitments, or to limit state authority to adopt rules, regulations, performance monitoring programs, or
other policies that are not inconsistent with these commitments.
******************************************************************************
I. INCREASING AVAILABILITY OF BROADBAND SERVICE
The Applicants commit to implement a significant deployment plan that will upgrade facilities
and expand broadband availability in legacy Qwest territory. The plan will entail substantial investments
during the seven years following the close of the transaction to achieve the following minimum levels of
broadband availability:
25
Federal Communications Commission FCC 11-47
FCC BROADBAND BUILD-OUT Current % %LUs %LUs %LUs
METRICS LUs 3 Years from 5 Years from 7 Years
Merger Closing Merger From
Date Closing Date Merger
Closing
Date
Living Units
l
with Access to at
Least 1.5 Mbps Downstream 87.0% 88.5% 90.0% 92.7%
from the Applicants
2
Living Units with Access to at
Least 5 Mbps Downstream 53.0% 62.0% 68.0% 78.8%
from the Applicants
3
Living Units with Access to at
Least 12 Mbps Downstream 28.8% 35.0% 42.0% 60.0%
from the Applicants
Living Units with Access to at
Least 40 Mbps Downstream 8.3% 15.0% 20.0% 30.0%
from the Applicants
Among other benefits of this investment, 4 million living units, including at least 20,000
community anchor institutions,4 in Qwest territory will gain access to broadband service at speeds of 5
Mbps or higher downstream. Today, these 4 million living units either have no Qwest broadband service,
or can qualify only for maximum downstream speeds lower than 5 Mbps. Of the living units upgraded to
1 A "Living Unit" is defined as a distinct address in Qwest's network inventory where Qwest currently has, had in
the past, or had planned to provide service to a customer. This includes, but is not limited to, single family homes,
multi-dwelling units (e.g., apartment buildings and condominiums), and business locations. These figures are
percentages of the total Living Units in Qwest territory, which was 16,463,946 as of October 1,2010.
2 Unless otherwise specified, speeds shown are speeds based on train rate. The train rate, or sync rate, is the line or
link data rate established between the DSLAM and the modem to provide stable customer service. Actual
throughput speed will be less than train rate, based on a variety of factors such as distance between computer and
speed test server (i.e., DNVR to DNVR versus DNVR to MPLS), individual computer performance, wireless vs.
hardwire connection to modem, operating system, TCP window size (amount of data a computer can receive),
software applications running in background, spyware / anti-virus software, etc.
3 Notwithstanding the speed definition in footnote 2, the Applicants commit that, at the level identified as at least 5
Mbps downstream, actual throughput speeds will be at least 4 Mbps downstream. In addition, of the living units
upgraded to at least 5 Mbps, at least 75% will have actual upstream throughput of at least 1 Mbps. Actual
throughput will be measured between the network interface unit (NIU) located at the end-user's premises and the
service provider Internet gateway that is the shortest administrative distance from the NID. See Federal
Communications Commission, Connecting America: The National Broadband Plan, at 156 n.2 (2010).
4 The Applicants use the definition of community anchor institutions previously employed by the Commission. See
Connect America Fund, et aI., Notice of Proposed Rulemaking and Further Notice of Proposed Rulemaking, WC
Docket No. 10-90, FCC 11-13 at <j[ 149 n.248 (reI. Feb. 9, 2011).
26
Federal Communications Commission FCC 11-47
at least 5 Mbps, at least 75% also will have at least 1 Mbps upstream (actual throughput) at the end of the
build-out period. In addition, as a result of this investment, broadband service at speeds of 12 Mbps or
more downstream - the speeds most often requested by small business customers - will be made available
to more than twice as many Qwest customers as have access to such speeds today.
This investment plan focuses on legacy Qwest territory. It will have no effect on existing
investment efforts and commitments to expand and upgrade facilities in legacy CenturyLink territory.5
This investment plan reaffirms CenturyLink's intention to be a leading provider of broadband services in
the United States.
Beginning on March 1, 2012, for data as of December 31, 2011, and every six months thereafter
(i.e., September 1 for data as of the end of June, and March 1 for data as of the end of December),
CenturyLink will report to the Wireline Competition Bureau the percentage of living units within the
Qwest territory to which CenturyLink offers broadband services capable of delivering at least 1.5 Mbps,
5 Mbps, 12 Mbps and 40 Mbps downstream, and the breakdown at each level between rural and non-rural
areas.
6
This reporting obligation will not expire three years following the Merger Closing Date, but will
continue until the earlier of: seven years following the Merger Closing Date or the achievement of all of
the minimum broadband availability metrics set forth above.
II. ENCOURAGING ADOPTION OF BROADBAND SERVICE IN THE COMBINED
TERRITORY
In order to promote adoption and use of broadband service, particularly within underserved
communities, the Applicants commit to implement a broadband adoption program within the combined
territory. The program has three goals: (a) reducing cost barriers for qualifying customers; (b)
addressing the lack of computer equipment among qualifying customers; and (c) improving education,
promotion and training as to the availability and uses of broadband.
As used herein, a "qualifying customer" is defined as a customer who: (i) is eligible for Lifeline
telephone service in CenturyLink or Qwest ILEC service territory; (ii) is not a CenturyLink or Qwest
broadband subscriber at the time of enrollment; and (iii) is not the subject of CenturyLink or Qwest
collections activity. The Applicants believe that approximately 2.3 million households currently are
eligible for Lifeline service throughout the combined CenturyLink and Qwest service territory.
CenturyLink's Adoption Program is comprised of the three components described below: the
Service Discount described in Subsection A, the Equipment Discount described in Subsection B, and the
Promotional Program described in Subsection C. Together with the reporting commitment described in
Subsection E, and the retention of an independent researcher identified in Subsection F, the Applicants
believe that this Adoption Program will produce substantial and measurable consumer benefits.
A. Service Discount: CenturyLink will offer discounted broadband Internet service for no
more than $9.95 a month during the first 12 months of service, and $14.95 a month for
5 CenturyTel-Embarq Order, FCC 09-54, at 30, App. C.
6 As used herein, a "rural" area is an area that is not located within a city, town, or incorporated area that has a
population of greater than 20,000 inhabitants, consistent with the definition employed by the Rural Utilities Service
of the U.S. Department of Agriculture in its implementation of the American Recovery and Reinvestment Act. See,
e.g., Department of Agriculture, Rural Utilities Service, Broadband Initiatives Program, RIN 0572-ZA01, 75 Fed.
Reg. 25185,25187 (May 7,2010). All other areas are non-rural.
27
Federal Communications Commission FCC 11-47
the remainder of the service term, to all qualifying customers in the combined
CenturyLink and Qwest territory. As a rule, the qualifying customer will gain access to
1.5 Mbps downstream capability, except in markets where 1.5 Mbps is unavailable, in
which case the customer will gain access to 768 kbps broadband capability. Higher
bandwidth services, where available, will be offered at a comparable discount:
1.5 Mbps' 5 Mbps 12 Mbps
Ongoing
Discounted $14.95 $19.95 $24.95
Monthly Rate
This discount plan will become available in all markets within six months following the
Merger Closing Date and will remain open for five years following the availability of the
adoption program in that market. At any time during that five-year period, a qualifying
customer may enroll in this service plan once, and he or she may choose a term of as little
as one year, which may be extended at the customer's option on a month-to-month basis
for as long as five years.
s
An "enrolled customer" is a qualifying customer who enrolls
in a contract to purchase broadband service from CenturyLink for a term of at least one
year and who remains a qualifying customer for the full term of his or her contract,
including any extension on a month-to-month basis.
B. Equipment Discount: CenturyLink will offer enrolled customers the ability to obtain one
piece of computer equipment (such as a netbook) per household, pre-configured with
operating software and Internet-ready, and with customary warranty from the
manufacturer when available, for no more than $150, provided that the customer agrees
to a two-year broadband services contract at the discounted rate described above. A
customer who obtains such equipment will have access to CenturyLink's 24/7 toll-free
help line.
C. Promotional Program: CenturyLink will implement a comprehensive customer
education, broadband promotion, and customer training program targeting qualifying
customers throughout the combined CenturyLink and Qwest territory.
1. The company will coordinate with at least 200 local community groups, such as
Boys & Girls Clubs and senior centers, as well as schools, libraries, and other
state and local institutions, especially those that support qualifying customers,
tribal partners, and non-profit institutions, to develop and distribute educational
materials that describe the uses and benefits of broadband capability.
2. CenturyLink will develop a meaningful promotional plan targeted to publicize
the availability of discounted broadband services and equipment, as described in
7 As stated above, 1.5 Mbps will be provided, except where it is unavailable, in which case 768 kbps will be
provided.
S CenturyLink's Lifeline customers will continue to have access to the same CenturyLink services and products as
other customers, on the same rates, terms, and conditions as other customers. CenturyLink will be attentive in
matching services and products to their individual needs.
28
Federal Communications Commission FCC 11-47
Subsections A and B above, to qualifying customers. CenturyLink will use at
least 500 different media outlets (which may include radio and television
stations, newspapers and magazines, on-line bulletin boards and web sites,
libraries and social service agencies). CenturyLink will spend at least $1 million
per year promoting the Adoption Program throughout the combined territory in
each of the first five years following the Merger Closing Date.
3. CenturyLink will make available in-person training demonstrations at local
anchor institutions, and develop and distribute materials such as DVDs with each
computer, to assist consumers in basic computer skills, Internet browsing, and
acquiring and using broadband services. CenturyLink will spend $1 million on
training over the first two years following the Merger Closing Date, and will
conduct 100 in-person training sessions and be responsive to requests for training
at locations across the combined territory in the first two-year period.
D. CenturyLink will begin rolling out this Adoption Program within six months following
the Merger Closing Date.
E. CenturyLink will report to the Wireline Competition Bureau on the Adoption Program's
progress every six months after the start of the Adoption Program, for the next five years
(i.e., a total of ten reports). The Commission will reassess the need for additional
reporting at the end of the five year period. The reports, as depicted in Attachment 1, will
describe in detail:
1. the personnel head count with responsibility for the program in each market;
2. the types of advertisements, demonstrations, training DVDs, and other tactics
utilized as part of the education, promotion and training aspects of the program;
3. the number of enrolled customers in the combined territory who purchased
broadband under the discount plan in the preceding six months and cumulatively
since the Merger Closing Date;
4. the number of enrolled customers who discontinued broadband service during the
preceding six months and cumulatively since the Merger Closing Date;
5. the number of enrolled customers who purchased discounted computers in the
preceding six months and cumulatively since the Merger Closing Date;
6. the cumulative broadband adoption numbers in the combined territory at the time
of each report, and compared to the adoption rate as of the Merger Closing Date;
7. the respective cost to CenturyLink of the Equipment Discount and Promotional
Program in the preceding six months and cumulatively since the Merger Closing
Date.
8. The number of attendees that participated in training at the 100 training locations
referenced above.
F. CenturyLink will evaluate the effectiveness of its Promotional Program, in consultation
with the independent researcher discussed in paragraph II.G below, on an annual basis
29
Federal Communications Commission FCC 11-47
beginning one year after implementing the Program. CenturyLink will modify the
Promotional Program as it deems appropriate to improve effectiveness, and will report to
the Commission any modifications that it makes. At least once a year, the reports filed
by CenturyLink pursuant to Section H.E will include a narrative description of the
company's assessment of the overall success of the Adoption Program, including specific
examples of aspects of the Program that have been most effective or least effective, or
that might be modified in the future to be more effective, to stimulate broadband adoption
in accordance with the goals of this Adoption Program and the Commission's National
Broadband Plan. To the extent that such reports contain competitively sensitive
information, such information may be submitted on a confidential basis.
G. CenturyLink will engage with an independent researcher to help monitor and assess the
impact of this Adoption Program. The results of the independent researcher's work will
be made available to the FCC. To the extent that such work contains competitively
sensitive information, such information may be submitted on a confidential basis.
III. PRESERVING COMPETITIVE RATES FOR CUSTOMERS IN OVERLAP BUILDINGS
IN MINNESOTA AND WASHINGTON
The buildings listed in Attachment 2 are locations where both of the Applicants have local
facilities, but for which the Applicants are unable to confirm from publicly available data whether or not
there are at least two other, unaffiliated fiber-based carriers in the building. In order to ensure that
existing customers in the buildings listed in Attachment 2 continue to obtain competitive rates for their
services following the Merger Closing Date, CenturyLink commits to the following condition:
The rates as of the Merger Closing Date for any service provided by CenturyLink or Qwest will
not be increased for either existing or new customers at any building listed in Attachment 2 for seven
years following the Merger Closing Date, except that the foregoing condition shall become inoperative as
to a particular building if: (i) one of the legacy CenturyLink or Qwest fiber facilities in that building is
divested prior to the expiration of such seven year period; or (ii) the number of competing carriers with
fiber facilities in the building returns to the level that existed prior to the Merger Closing Date; or (iii) the
FCC engages in comprehensive changes to its special access rules requiring industry-wide changes to
rates or rate structure for the services covered by this condition. For avoidance of doubt, nothing herein
shall restrict CenturyLink from lowering rates to any customer at any time.
IV. COMMITMENTS REGARDING WHOLESALE OPERATIONS
A. Operations Support Systems ("aSS") Replacement:
1. In Qwest ILEC territory, following the Merger Closing Date, CenturyLink will
not replace Qwest ass or integrate it with any other ass for at least 30 months
following the Merger Closing Date, and thereafter will provide a level of
wholesale service quality that is not less than that provided by Qwest prior to the
Merger Closing Date, with functionally equivalent support, data, functionality,
performance, electronic flow through, and electronic bonding.
2. If CenturyLink plans to replace Qwest ass or integrate it with any other ass,
then at least 180 days before replacement or integration of any of the Qwest ass,
CenturyLink will notify the FCC, affected states, and affected wholesale
customers, file its proposed transition plan with the Commission and the affected
states, and seek input from affected wholesale customers on such transition plan.
30
Federal Communications Commission FCC 11-47
CenturyLink will prepare a detailed OSS transition plan describing the OSS to be
replaced or integrated, the surviving OSS, and why the change is being made.
The plan also will identify planned contingency actions in the event that
CenturyLink encounters any significant problems with the planned transition.
The plan submitted by CenturyLink will be prepared by information technology
professionals with substantial experience and knowledge regarding legacy
CenturyLink and legacy Qwest systems processes and requirements. CLECs will
have the opportunity to comment on the Merged Company's plan in a forum in
which it is filed, if the regulatory body allows comments, as well as in the Qwest
Change Management Process.
3. The commitments made in this Section IV.A will not expire three years
following the Merger Closing Date.
B. In the Qwest ILEC territory, CenturyLink will maintain wholesale functionality,
performance and e-bonding at a level that is at least comparable to what Qwest is
providing prior to the transaction Merger Closing Date, subject to reasonable and normal
allowances for the integration of CenturyLink and Qwest systems. For the metrics
described below, CenturyLink will maintain a comparison of actual quarterly results to a
benchmark value to be set at one standard deviation below the twelve-month average
results achieved for the twelve full months prior to January 2011 (i.e., from January
through December 2010), assessed on a quarterly basis, separately for each state.
CenturyLink will maintain service at a level that is no worse than the benchmark value,
90 percent of the time over four consecutive quarters beginning on the Merger Closing
Date, excluding instances in which the base universe number of events being evaluated
(i.e., the denominator) is 20 or less.
• Pre-Ordering - Average response time to pre-order queries calculated in seconds,
which measures the number of seconds from CenturyLink's receipt of a query
from a CLEC to the time CenturyLink returns the requested data to the CLEC;
this would be reported for all areas transferred from Qwest in aggregate.
• Ordering - The percentage of electronically submitted resale and UNE orders
confirmed within the following timeframes:
POTSlPre-Qualified Special Services
Complex
Orders with < 10 Lines 24 hours 24 hours
Orders with> 10 Lines 48 hours 48 hours
• Provisioning - Missed appointment rates/appointments met, and the average of
by how many days the appointment was missed, average delay days, broken out
by Resale and UNE Loop POTS.
• Provisioning - Percentage of installation troubles reported within 30 days for
UNE Specials, which measures the percent of lines/circuits/trunks installed
where a trouble was reported and found in the network within 30 days of order
completion.
31
Federal Communications Commission FCC 11-47
• Provisioning - Percentage of installation troubles reported within 30 days for
Resale POTS and UNE Loop POTS, which measures the percent of
lines/circuits/trunks installed where a trouble was reported and found in the
network within 30 days of order completion.
• RepairlMaintenance - Network Trouble Report Rate, which measures the total
number of network customer trouble reports received within a calendar month
per 100 units/UNEs, separately for Resale and UNE Loop POTS.
• RepairlMaintenance - Mean Time to Repair, which measures the average
duration from the receipt of the customer trouble report to the time the trouble is
cleared, separately for Resale and UNE Loop POTS.
• RepairlMaintenance - Percentage of Repeat Reports within 30 Days for Resale
POTS, UNE-Loop POTS and UNE Specials, which measures the percent of
customer network trouble reports received within 30 calendar days of a previous
customer network trouble repmt.
• Carrier Service Center - Average Speed of Answer, the average time it takes
CenturyLink's local customer service c'enter(s) to answer a repair or ordering
call. This would be reported for all areas transferred from Qwest in aggregate.
C. Following the Merger Closing Date, in the Qwest ILEC territory, the company will:
1. Continue to provide the monthly reports of wholesale performance metrics that
Qwest currently provides to CLECs and provide access to these metrics to state
Commission or FCC staff;
2. Comply with all wholesale performance reporting requirements and associated
penalty regimes currently applicable to Qwest, including but not limited to those
applicable under Performance Assurance Plans ("PAPs"); and
3. Provide the performance reports that Qwest currently provides to existing
wholesale customers to any new entrants in the Qwest ILEC territories.
D. Orders will be processed in compliance with federal and state law, as well as the terms of
applicable interconnection agreements.
E. For 12 months following the Merger Closing Date, CenturyLink will not discontinue any
Qwest interstate wholesale service offered to competitive carriers in the Qwest territory
as of the Merger Closing Date, except as approved or ordered by the Commission.
F. In legacy Qwest ILEC territory, interstate term and volume discount plans offered for
tariffed services by Qwest as of the Merger Closing Date will be extended by 12 months
beyond the expiration of the then-existing term, or until May 1, 2013, whichever is later,
unless the wholesale customer opts out of this extension. Term and volume discount
plans that would otherwise expire between the date the FCC order is adopted and the
Merger Closing Date will be extended through the Merger Closing Date at the wholesale
32
Federal Communications Commission FCC 11-47
customer's option, such that the additional 12 months provided under this provision will
run from the Merger Closing Date.
G. CenturyLink will honor all obligations under existing Qwest and CenturyLink
interconnection agreements in effect as of the Merger Closing Date, and will extend any
such interconnection agreements, unless the wholesale customer opts out of this
extension, for 36 months following the Merger Closing Date, except that any
interconnection agreement the term of which already was extended by operation of the
CenturyTel-Embarq Order is exempt from this 36-month extension.
H. CenturyLink will allow any wholesale customer with a pre-existing interconnection
agreement to use that agreement as the basis for negotiating an initial successor
interconnection agreement. Where parties agree it is reasonable to do so, the parties may
incorporate the amendments to the existing agreement into the body of the agreement
used as the basis for such negotiations of the initial successor interconnection agreement.
1. CenturyLink will permit any requesting carrier under Section 251(b) desiring
interconnection agreements with more than one CenturyLink ILEC operating within the
same state to simultaneously negotiate interconnection agreements with all such
CenturyLink ILECs operating in the same state. These unified negotiations will include
negotiation of common terms, but CenturyLink reserves the right to negotiate individual
terms unique to each operating company in the state.
J. CenturyLink will not assert that any state lacks Section 252 jurisdiction over a Section
251 (b) interconnection agreement or dispute on the grounds that such agreement or
dispute also arises under these commitments and conditions.
K. Following the Merger Closing Date, CenturyLink will not assert that any of its rural
telephone companies are exempt from Section 251(c) obligations pursuant to Section
251 (f)(l) of the Communications Act, as amended. This commitment will not expire
three years following the Merger Closing Date.
L. CenturyLink will not seek to recover through wholesale service rates one-time transfer,
branding or other merger-specific costs.
V. COMMITMENTS TO ADVANCE FEDERAL UNIVERSAL SERVICE REFORM
The conditions in this section will not expire three years after the Merger Closing Date.
A. CenturyLink Will Phase-Out Federal Local Switching Support ("LSS")
1. LSS funding will be phased down in three equal steps over two years, beginning
January 1,2012. The baseline for reduction will be CenturyLink's actual 2010
calendar year support for LSS, based on the final calculations for 2010 that
CenturyLink will file in December 2011. The SUppOlt for the 2012 calendar year
will be two-thirds of the baseline amount, and the support for the 2013 calendar
year will be one-third of the baseline amount. Beginning calendar year 2014,
CenturyLink will receive no federal LSS funding for 2014 or any subsequent
calendar year, unless and until the FCC adopts a new final order governing LSS,
upon which CenturyLink will be eligible to receive LSS funding on the same
terms as the rest of the industry.
33
Federal Communications Commission
B. CenturyLink Will Forgo Future Federal Safety Net Additive Payments
FCC 11-47
1. The company will forgo safety net additive payments for calendar year 2012 and
subsequent calendar years.
C. CenturyLink Will Submit a Plan for Its Three Remaining Average Schedule Companies
to Freeze Interstate Common Line Support ("ICLS") On a Per-Line Basis
1. CenturyLink commits to freeze ICLS on a per-line basis, effective January 1,
2012. CenturyLink will work with NECA and the Commission to determine if
the operating companies at issue should remain average schedule companies.
Upon such consultation, the Commission will determine within six months of the
Merger Closing Date whether conversion to price caps is more appropriate, and if
the Commission so determines, then CenturyLink commits to convert the average
schedule companies to price caps by July 1,2012 and then freeze ICLS
consistent with Commission precedent.
VI. VIDEO COMPETITION REPORT
A. CenturyLink will file FCC Form 325 for the three reporting cycles following the Merger
Closing Date for any market in which it has IPTV subscribers, provided that
CenturyLink's agreement to this reporting obligation does not constitute an admission by
the company that it is providing cable service or that it is a cable system operator.
CenturyLink may submit competitively sensitive information on a confidential basis.
34
Federal Communications Commission
ATTACHMENT 1-BROADBAND ADOPTION METRICS
FCC 11-47
Plan to be finalized by the company within Data Set
6 months following Merger Closing Date:
Personnel designated on adoption program As of Merger Closing Date
(updated as changes apply)
Tactics and institutional partners identified As of Merger Closing Date
(updated as appropriate)
Qualifying Lifeline customers identified As of Merger Closing Date
Total broadband adoption in the combined As of Merger Closing Date
territory
Metrics to be reported semi-annually to the Preceding 6-month Period Cumulative
FCC:
Qualifying customers who purchased
broadband under discount program, by speed
tier
Qualifying customers who purchased
computers under discount program
Number of training programs and
demonstrations held
Number of people attending training programs
and demonstrations
Number of training DVDs and CDs shipped
Number of enrolled customers who continue
to subscribe to CenturyLink broadband
service following expiration of their
participation in the Adoption Program
Total broadband adoption in the combined
territory
Total cost to the company of the Adoption
Program
Number of qualifying customers who
discontinued CTL or Q broadband service
35
Federal Communications Commission FCC 11-47
ATTACHMENT 2 - BUILDINGS FOR WHICH THE APPLICANTS COMMIT NOT TO
RAISE RATES FOR SEVEN YEARS FOLLOWING MERGER CLOSING DATE
1 Capital Drive
10 11 th Avenue N
10001 W 78
th
Street
11010 Prairie Lakes Drive
113 S 6
th
Street
1820 Xenium Lane N
18790 W 78
th
Street
200 S 5
th
Street
2440 Galpin Court
314 W 90
th
Street
3601 Minnesota Drive
400 W 98
th
Street
4141 Douglas Drive N
4700 Welcome Avenue N
5051 Highway 7
605 Highway 169 N
6160 Golden Hills Drive
6500 France Avenue S
690 Coulter Drive
70 W 4
th
Street
710 Mendelssohn Avenue N
7505 Metro Boulevard
7599 Corporate Way
7625 Smetana Lane
7711 Kerber Boulevard
7800 Equitable Drive
8000 Audubon Road
8080 Mitchell Road
8120 Penn Avenue S
90 Church Street SE
9531 W 78
th
Street
9625 W 76
th
Street
9923 Valley View Road
100 E Lindstrom Street
1700 Cherry Street
2020 80
th
Avenue
2109 Sumner Avenue
301 S Faragut Street
601 School Road
900 Cleveland Street
Eden Prairie
Eden Prairie
Eden Prairie
Eden Prairie
Minneapolis
Plymouth
Chanhassen
Minneapolis
Chanhassen
Bloomington
Bloomington
Bloomington
Clystal
Crystal
Minneapolis
Plymouth
Golden Valley
Minneapolis
Chanhassen
St. Paul
Golden Valley
Edina
Eden Prairie
Eden Prairie
Chanhassen
Eden Prairie
Chanhassen
Eden Prairie
Bloomington
Minneapolis
Eden Prairie
Eden Prairie
Eden Prairie
Aberdeen
Aberdeen
Tumwater
Aberdeen
Aberdeen
Aberdeen
Aberdeen
36
MN 55344
MN 55344
MN 55344
MN 55344
MN 55402
MN 55441
MN 55317
MN 55402
MN 55317
MN 55420
MN 55435
MN 55420
MN 55422
MN 55429
MN 55416
MN 55441
MN 55416
MN 55435
MN 55317
MN 55102
MN 55427
MN 55439
MN 55344
MN 55344
MN 55317
MN 55343
MN 55317
MN 55344
MN 55431
MN 55455
MN 55344
MN 55344
MN 55344
WA 98520
WA 98520
WA 98512
WA 98520
WA 98520
WA 98520
WA 98520
Federal Communications Commission
STATEMENT OF
CHAIRMAN JULIUS GENACHOWSKI
FCC 11-47
Re: Applications Filed by Qwest Communications International Inc. and CenturyTel, Inc. d/b/a
CenturyLinkfor Consent To Transfer Control, WC Docket No. 10-110
Today, after a thorough, data-driven review of the record, the Commission approves a transaction
that holds the promise of significantly improving broadband adoption and increasing high-speed
broadband deployment and competition for tens of thousands of anchor institutions, hundreds of
thousands of small businesses, and tens of millions of consumers.
Congress has directed us to approve transactions if the public interest benefits outweigh the
harms. 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.
These commitments include a major broadband adoption program focused on the millions of low 
income consumers in the combined company's 37-state territory. By offering broadband starting at less
than $10 per month; providing computers for less than $150; keeping the window open for five years for
qualifying consumers to sign up; and committing real resources to marketing, outreach, and digital
literacy training, this program holistically tackles the principal barriers to broadband adoption.
I'm particularly pleased that the program will include detailed reporting on outcomes and an
independent analysis of the program's effectiveness, so that the Commission and others can understand
what works and what doesn't in efforts to close the adoption gap.
This program promises to move the needle on broadband adoption. And it should be viewed
together with the broadband adoption pilot programs the Commission proposed in last month's
LifelinelLinkUp proceeding, and the broadband adoption program Comcast is undertaking in the wake of
its recent transaction. As a result of these developments, we will soon have a set of diverse and promising
responses to one of our great national challenges-eonnecting the more than 100 million Americans who
don't currently have broadband.
CenturyLink has also committed to significant investments in improving and expanding its
broadband network for consumers, businesses, and anchor institutions, and to advancing Universal
Service Fund reform by phasing down support it currently receives from the Fund. I also note the
important commitments made to ensure a smooth transition for wholesale customers, and to protect
against the potential increase in the combined entity's incentive and ability to inhibit effective
competition as a result of its significantly bigger footprint. Well-functioning wholesale markets are
crucial for effective competition in the broadband ecosystem, particularly for enterprise and small
business customers, and I look forward to seeing competition flourish in the territories involved in this
transaction.
Some have argued that the Commission should forswear public interest commitments in the
context of transaction reviews. But doing so would not only deny the public the kinds of meaningful
transaction-specific benefits involved here; it would also disregard Congress's directive that the FCC
affirmatively determine that a proposed transaction will serve "the public interest, convenience, and
necessity."
While this transaction will help address broadband challenges in the combined territory, it is only
one piece in a larger puzzle. To more fully address the broadband deployment and adoption gaps, the
FCC must complete its efforts to reform the Universal Service Fund, including by supporting broadband
37
Federal Communications Commission FCC 11-47
in rural areas and by reforming and modernizing LifelinelLinkUp. I look forward to pressing ahead with
my colleagues on these ongoing initiatives.
I thank the Bureaus and Offices, particularly the Wireline Competition Bureau, for their work on
this transaction.
38
Federal Communications Commission
CONCURRING STATEMENT OF
COMMISSIONER MICHAEL J. COPPS
FCC 11-47
Re: Applications Filed by Qwest Communications International Inc. and CenturyTel, Inc. d/b/a
CenturyLinkfor Consent To Transfer Control, WC Docket No.10-11 0
Today the Commission approves the merger of two companies with a history of providing
communications services in rural America. As with every transaction before the Commission, it is our
statutory duty to weigh the potential benefits and potential harms of the proposed merger and determine
whether it serves the public interest. As we mark the one-year anniversary of the National Broadband
Plan, the salient question for me is whether approval of this transaction promotes or hinders the goal of
affordable access to high speed, value-laden advanced telecommunications (broadband) service for all our
citizens.
We are told that this combination will help expand the benefits of broadband to consumers and
communities across the country-that the new CenturyLink will be a stronger company with greater
resources to invest in its now significantly expanded service territory. On this score, I believe the
applicants' commitments on broadband deployment are a step in the right direction. But the public
interest here calls for bold strides, not timid steps. I would have welcomed greater and more explicit
commitments to provide broadband access to rural and genuinely unserved areas. It is my hope that the
applicants will go above and beyond the pledges made here. I am pleased that the commitments have
been expanded to include the provision of broadband service to at least 20,000 community anchor
institutions. Unfortunately, in the absence of even rudimentary reporting requirements on deployment to
these anchor institutions, we will have to take the company at its word that it is meeting this goal.
Measurable results, not "take our word for it" assurances, are what the Commission needs to focus on.
They are the coin of the realm.
The merged company is making a significant commitment to promote broadband adoption among
low-income consumers. Its program rightly targets key obstacles to broadband adoption by providing
discounted service, training, and low-cost computer equipment to Lifeline-eligible households. This is a
welcome new initiative that holds great promise. The Commission needs to monitor and learn from this
effort-which is why it is so important that the applicants will be reporting to the Commission about the
progress and success of this program.
Given the scale of this transaction and the size of the combined company, I would have much
preferred that our action today included an enforceable commitment to protect consumers' open Internet
rights. Absent this, we must be hopeful that truly effective implementation and enforcement of the rules
we adopted in December will safeguard consumers online. However, I believe it would have been
entirely appropriate to impose a transaction specific condition here and it would make for a more
acceptable outcome.
For the reasons outlined above, I limit my support of this transaction to concurrence only.
39
Federal Communications Commission
CONCURRING STATEMENT OF
COMMISSIONER ROBERT M. MCDOWELL
FCC 11-47
Re: Applications Filed by Qwest Communications International Inc. and CenturyTel, Inc. d/b/a
CenturyLink for Consent To Transfer Control, WC Docket No.10-11a
Approval of this transaction is in the public interest. Together, the combined companies will be
better able to provide advanced services to consumers who live in some of the most remote parts of our
country than if they were to remain separate. I am concerned, however, that the Commission is
continuing to create a prescriptive merger review process that unnecessarily raises the costs of such
beneficial transactions. Regulatory costs are not free and are ultimately paid for by American consumers.
Ifthis trend continues, fewer companies may elect to engage in transactions that could accelerate
investment and innovation, help grow the economy and create jobs. Accordingly, I respectfully concur.
40
Federal Communications Commission
STATEMENT OF
COMMISSIONER MIGNON L. CLYBURN
FCC 11-47
Re: Applications Filed by Qwest Communications International Inc. and CenturyTel, Inc. d/b/a
CenturyLinkfor Consent To Transfer Control, WC Docket No. 10-110
This Commission has a duty to ensure that the public interest is served as a result of any proposed
transfers of control. Today, we find that the merger of CenturyLink and Qwest is in the public interest.
Through their commitments, the companies have addressed some of the possible harms that could occur as a
result of the transaction, and have pledged to improve broadband deployment in the Qwest territory and
broadband adoption by low-income consumers in both Qwest's and CenturyLink's territories. These
commitments also include regular reporting so that we can assess the merged company's progress in
meeting its deployment and adoption obligations.
There were several issues, however, that I believe should have been more specifically addressed in
our review. The companies asserted that post-merger CenturyLink will continue to focus on rural
customers, yet the company did not provide sufficient information in the proceeding so that we could
ensure that result. While the companies pledge to inform us in their regular reporting the broadband
deployment that occurs in rural versus non-rural areas, I would have preferred a specific, verifiable
commitment to deploy broadband in unserved, rural areas. I also remain concerned that the merger will
change the post-merger company's incentives with respect to its service offerings. 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.
The companies' commitment to address the affordability of broadband for consumers throughout
its post-merger service territory is a significant step. I commend the companies for developing a plan
based on the CenturyLink business model to introduce and manage its adoption program at the local level
in order to meet the communities' low-income needs. As a nation, we must address the broadband
affordability issue in order to ensure that every American has the opportunity to connect at home. We
know that addressing the barriers to adoption may vary based on whether citizens live in urban or rural
areas. I appreciate the company's commitment to share its experiences and findings with us so that we
cari learn more about what works and doesn't work in addressing the adoption issues in its local areas, as
well as its commitment to inform us of its program's effectiveness and the improvements it makes to
ensure its success. As a result of its dedication to improve services to low-income Americans, the
company's experience will inform our decision-making with respect to reforming the Lifeline program
and our ongoing consideration of extending that program to include broadband pilot projects for Lifeline 
eligible consumers.
41
Federal Communications Commission
CONCURRING STATEMENT OF
COMMISSIONER MEREDITH ATTWELL BAKER
FCC 11-47
Re: Applications Filed by Qwest Communications International Inc. and CenturyTel, Inc. d/b/a
CenturyLinkfor Consent To Transfer Control, WC Docket No. 10-110
I support this transaction, and believe that a combined CenturyLinklQwest will create a stronger
company with a clear rural focus to the benefit of consumers across their 37 state footprint. I have serious
reservations, however, with the length of this review and some of the conditions imposed on this
transaction.
I recently expressed my concerns with our merger review process/ and, unfortunately, I believe
this transaction is further evidence we need to take a hard look at how we review transactions. Our
current process does not serve the public interest, and it should be overhauled before we conduct another
major merger review.
I acknowledge that the conditions and timing of this merger are consistent with our practice over
the past decade, and likely met the expectations of the Applicants. That does not mean we are doing the
job the public interest or our economy demands. We need to do better. This Commission is quick to
point out that regulatory "red tape" can act as a "significant obstacle" to "businesses ability to invest in
new technologies and hire new workers." Yet the Commission has done nothing to address how its
merger review process is one of the clearest examples of the "red tape" problem that is within our
discretion to fix.
The Review Took Longer Than Necessary.
Our review took over 300 days. The Department of Justice cleared this transaction over 240 days
ago. While a number of state commissions just recently completed their reviews, I believe our lack of
urgency may have contributed to a longer process at the state level. Regardless, we could-and should 
have conducted our statutory review of this transaction in a thorough manner in the allotted 180 days.
There are 49,000 employees of the combined company that have experienced a year of professional
uncertainty, and two companies have been unable to move forward to better serve rural communities.
Given the very limited set of public interest harms identified in the Order, we should have been able to
conclude this review in a much more timely manner.
The Conditions Addressing Alleged Public Interest Harms Are Not Sufficiently Supported.
The Commission has become too comfortable with imposing conditions on merging parties.
Prior to imposing any condition, we should establish a clear evidentiary record demonstrating the
existence of a merger-specific harm. We should then make an explicit finding that the harm necessitates a
condition, and provide a clear description of that condition and how it mitigates against the harm in a
directly proportional manner. With some limited exceptions, the Order fails to provide the detail
necessary to properly evaluate the conditions imposed on the merging parties.
1 Remarks of Commissioner Meredith Attwell Baker, Towards a More Targeted and Predictable Merger Review
Process, IPI Third Annual Communications Summit (Mar. 2, 20ll).
42
Federal Communications Commission FCC 11-47
Specifically, conditions are imposed to address four sets of asserted merger harms. One set of
conditions addresses Qwest's Operations Support Systems (OSS). These conditions relate to concerns
about CenturyLink's operation of-and potential modification to-the Qwest ordering system. These
conditions are certainly merger-specific, but based on the limited record outlined in the Order, I do not
think we have demonstrated a documented public interest harm to cure. Simply stating that commenters
expressed OSS concerns is not a basis to impose a condition. The Commission needs to make a clear
finding of its own and document the harm with far greater specificity. We also need to consider more
comprehensively other existing remedies available to those parties concerned with OSS issues. To that
end, there is an inadequate explanation as to why existing statutory protections under section 271, and the
corresponding state processes and procedures, are not sufficient to check against any these potential
harms. Nor is there an analysis of state-imposed conditions or commercial settlement agreements that
may also address these concerns sufficiently. We acknowledge these additional protections without
detailing why we find them lacking. I do not rule out the need for OSS-specific conditions, but it is far
from clear on the record before us that there is a merger-specific harm that is inadequately addressed by
protections already in place. It is similarly not possible on this record to evaluate whether the imposed
conditions are narrowly tailored or proportional to the harm.
The next two set of conditions address interconnection agreements and wholesale competition
issues. These conditions suffer the same basic infirmity. The cursory discussion of these alleged harms,
relevant existing protections, and the related conditions similarly forecloses a proper evaluation. One
condition in particular bears highlighting: CenturyLink is prohibited from asserting some of its rights
under section 251. A regulatory agency requiring companies to waive their statutory rights in order to
gain regulatory approval raises red flags in and of itself. Further, the Order fails to develop any merger 
specific, let alone merger-harm-specific, basis to impose the condition. CenturyLink's ability to claim the
rural exemption existed prior to this transaction, and has nothing to do with Qwest or CenturyLink's
acquisition of Qwest. There is also no evidence in the Order that CenturyLink asserts these rights today
in an anti-competitive manner.
2
In contrast, I believe that Commission has crafted a narrowly tailored condition to address the risk
of lost competition in 40 specific buildings in the special access market. I support our refusal to address
broader special access pricing issues that the Order properly notes are "better addressed in the special
access rulemaking." With respect to the condition itself, I would have preferred some analysis as to why
"at least two other, unaffiliated fiber-based carriers" is the criteria used to determine the applicable
buildings, and why a single unaffiliated provider would not be sufficient to check against any potential
harm. An explanation is also warranted as to why this condition needs to be in place for seven years. I
2 This condition is also clearly distinguishable from one imposed in the VerizonIFrontier deal. In that instance, the
condition was limited to the properties Frontier was acquiring from Verizon. The Commission did not want a
relatively large company using an acquisition as a basis to establish new statutory rights intended for small carriers.
Frontier Communications Corporation and Verizon Communications Inc. for Assignment or Transfer ofControl,
Memorandum Opinion and Order, FCC 10-87, lj[ 40 (2010) (explaining that "Frontier has committed not to assert
that is exempt from section 251(c) obligations pursuant to section 251(f)(l) in the areas transferred from Verizon
that are rural telephone companies outside of West Virginia, or 'to move or reclassify any exchanges or wire centers
currently located in Verizon West Virginia's legacy service areas so as to ... take advantage of the rural exemption
under Section 251 (f)(l)."'). There is no analogous concern here, and this condition is far broader. The Commission
must be careful to avoid reflexively applying merger conditions from prior transactions on future deals; each
transaction must be evaluated based on the evidentiary record of the immediate proceeding.
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Federal Communications Commission FCC 11-47
believe there needs to be a documented basis for any condition imposed on parties that lasts longer than
the default three years, yet no explanation is given here.
The Need for Additional Commitments is Unproven.
Two companies with complementary businesses and footprints with a record of serving rural
America assert that together they will be able to provide a better platform to serve consumers, compete
with cable and wireless competition, and expand new offerings. We have adopted a series of conditions
to address the limited harms identified by commenters. It is unclear on this record why additional
conditions are warranted.
Even if additional conditions were appropriate, a number of these conditions bear no relation to
any harm associated with the underlying transaction. I fully support the efforts of the Applicants to invest
in more broadband infrastructure and to expand efforts to increase broadband adoption. This is great
corporate citizenship, but I do not think they should be extracted as merger conditions. In particular, I
have concerns with government mandating broadband investments for seven years. Seven years is an
eternity in this dynamic space, and the market conditions and consumer demands of 2018 are not known
today by the companies or the Commission. With respect to broadband deployment, we should have
explained why the significant conditions at the state level on the same issue are insufficient: Arizona
required $70 million in broadband investment, Colorado $70 million, Utah $25 million, Minnesota $50
million and so on.
One last condition to highlight is the commitment of the companies to surrender some universal
service support. This type of condition is representative of how our process is broken. There is no nexus
between the relinquishment of universal service funding and this transaction, and none is claimed in the
Order. We require CenturyLink to forego universal service funding it is entitled to prior to-and after
this-transaction. Whether a company the size of CenturyLink and Qwest, separate or apart, should be
entitled to universal service support intended for small carriers is an important policy question, and a
question directly under review in a rulemaking proceeding.
3
I do not believe the Commission should use
merging parties as a test case for a new policy or a mechanism to signal future policy to industry at large.
* * *
I ultimately support this transaction. The Applicants determined that as conditioned, this
transaction still makes economic and competitive sense. I have no basis to second guess their decision,
but concur in the result because of the infirmities in the process used by the Commission to approve
transactions.
3 Connect America Fund, Notice of Proposed Rulemaking and Further Notice of Proposed Rulemaking, FCC 11-13,
<j[<j[ 182-193 (2011).
44