CenturyLink to reapply for FCC permission to shut down ATM, Frame Relay services

FCC headquarters

CenturyLink wants to shut down its legacy ATM and Frame Relay services – two products that a growing majority of its business customers have transitioned off to Ethernet and IP-based services – so it plans to ask the FCC for permission again to discontinue these services.

After initially filing a request to shut down the services in October 2013, the FCC’s Wireline Competition Bureau (WCB) told CenturyLink that the application would not be “granted automatically.”

As a result, CenturyLink has withdrawn the earlier application (PDF). The telco told the FCC it will submit a new application to discontinue its Frame Relay service and ATM services throughout all 50 U.S. states where it operates today.

CenturyLink’s request should be of no great surprise. Like fellow telcos AT&T and Verizon, CenturyLink is also seeing its legacy business service revenues continue to decline every quarter as revenues from next-gen services like Ethernet rise.

The telco’s third quarter earnings reflect this disparity.

Business service revenues in the third quarter were $2.61 billion, down 1.1 percent from third quarter 2015, primarily due to a decline in legacy revenues. Those declines were partially offset by a 6 percent growth in high-bandwidth data revenues, and strategic revenues were $1.23 billion in the quarter, an increase of 5.1 percent from third quarter 2015.

CenturyLink’s disparity between legacy and next-gen services will become even more evident once it completes its acquisition of Level 3 Communications, which it just announced yesterday.

Level 3, which has also been advancing its standing in the Ethernet and IP VPN market, continues to see more of its customers transition away from legacy services like Frame Relay and ATM.