Minnesota PUC delays decision on CenturyLink, Qwest merger

CenturyLink's (NYSE: CTL) impending acquisition of Qwest (NYSE: Q) hit a small snag as the Minnesota Public Utilities Commission decided to delay its final decision on whether to approve its acquisition of the RBOC over CenturyLink's ability to provide consistent wholesale services for a number of smaller competitive carriers.

On Thursday, the PUC voted 3-2 to regroup in March to make a final decision on the deal. While many industry watchers thought the deal would have gotten the green light, they added that the PUC will likely approve since there hasn't been any major arguments against it going forward.  

However, Commissioner J. Dennis O'Brien said just because no one has raised major objections doesn't mean that the PUC does not have their own issues in approving the deal.

"Running Qwest is a unique experience, and it is beyond anything CenturyLink has faced to date," he said in his argument to delay the decision. "There was no evidence that the acquisition agreement meets the public interest."

It's likely what bought on the delay was an ongoing dispute between Qwest and a coalition of its smaller wholesale customers on how CenturyLink would support them after the deal is completed. While Qwest and CenturyLink reached agreements with larger competitive carriers such as Integra Telecom and Cox Communications, there are a number of smaller operators that are concerned that their service will degrade when the deal is complete.

In somewhat more positive related news, wholesale customer tw telecom (Nasdaq: TWTC) dropped its previous complaint it filed with the FCC last month against the deal.

Now, it is taking part in a previous agreement CenturyLink and Qwest reached with fellow CLEC Integra Telecom. Among the several tenets of that agreement was that it would not only continue to provide it with not only IP peering and service support, but also provide the same support and performance reports Qwest had given them before the deal was struck.

Since CenturyLink announced its intentions to purchase Qwest last April, a number of states and antitrust approval of the deal.

For more:
- Minneapolis Star Tribune has this article

Related articles:
CenturyLink, Qwest: A new service provider era?
CenturyLink, Qwest merger consolidates more of the landline market
CenturyLink gets U.S. antitrust approval to proceed with Qwest acquisition

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