CenturyLink-Qwest deal comes under DoD scrutiny

CenturyLink's (NYSE: CTL) bid to purchase RBOC Qwest (NYSE: Q), while gaining nine PUC approvals and even U.S. antitrust approval, is now facing opposition from the Department of Defense (DoD).

In conjunction with the Federal Executive Agencies (FEA), the DoD has filed testimony with utility commissions in four of Qwest's operating states, including Arizona, Colorado, Utah and Washington state, areas that include a number of large military bases and various civilian agency operations.

The DoD wants each of these state PUCs to place conditions on CenturyLink's acquisition to ensure service quality won't be degraded after the deal is completed.

At issue is CenturyLink's ability to provide services itself to government agencies, but also to provide necessary wholesale access connections so they can deliver services to the DoD and civilian agencies that reside in the four states.   

"If the proposed transfer is approved, it is important to DoD/FEA that CenturyLink's competitors have the opportunity to access Federal installations on a fair and reasonable basis through CenturyLink facilities and that CenturyLink be able to render service to Federal locations even outside of its service territories," stated the DOD/FEA in each filing. "Moreover, CenturyLink itself must be a sophisticated competitive bidder capable of providing the full range of telecommunications services at reasonable costs to the Federal government."

Opposition to the CenturyLink-Qwest deal isn't relegated to just the DoD, however. Other service providers, including Level 3 and Sprint, and state telecom and consumer advocacy groups including the Utah Rural Telecom Association (URTA), the Arizona Consumers Council and the Minnesota and Washington state PIRGS, have opposed the deal.

For more:
- see the release

Related articles:
CenturyLink, Qwest merger consolidates more of the landline market
CenturyLink gets U.S. antitrust approval to proceed with Qwest acquisition
Big Three indie telcos strive for identity

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