WASHINGTON (CN) — Signing off on CenturyLink’s $34 billion takeover of Level 3 Communications, the Justice Department told a federal judge that the telecommunications giants will heed antitrust concerns by giving up some of the assets.
In a consent decree filed Monday in the U.S. District Court for the District of Columbia, the Justice Department earmarked Level 3’s telecommunications networks in Albuquerque, Boise, and Tucson as assets facing divestiture.
CenturyLink and Level 3 must also enter into long-term leases called indefeasible rights of use (IRUs) for dark fiber – a type of fiber optic line not currently being utilized – along 30 intercity routes.
The acquisition remains subject to regulatory approval from the Federal Communications Commission and the California Public Utilities Commission. Sixteen states and the District of Columbia have approved the deal, but five states – Connecticut, Indiana, Louisiana, Montana, Nevada, Texas – and Puerto Rico still need to approve the deal.
The transaction is also subject to review by the Federal Communications Commission, which is ongoing. Antitrust regulators at the Justice Department coordinated with the FCC throughout their investigation.
CenturyLink will hold on to its existing networks and business operations in the three metro areas and will continue to provide telecommunications and data services to residential and business customers.
"We are pleased that the Department of Justice has conditionally cleared CenturyLink's acquisition of Level 3," John Johns, a senior vice president at CenturyLink, said in a statement. "It is an important milestone in our overall approval process. We anticipate court approval of our agreed resolution with the Department of Justice as early as this week. We are focused on meeting our targeted transaction closing timeframe of mid-to-late October.”
The companies are seeking investors looking to purchase the assets stipulated in the settlement.
Assistant Attorney General Makan Delrahim credited the competition between CenturyLink and Level 3 as having brought lower prices and higher-quality services for consumers, “in local telecommunications services and in the sale of intercity dark fiber.”
“These divestitures will ensure that consumers of such services in the affected metropolitan areas and consumers of dark fiber between the city pairs in question will continue to enjoy the benefits of competition,” Delrahim added.
Level 3, one of the largest competitive exchange carriers (CLEC) in the United States, is a Fortune 500 company that provides local, national and global communications services to a plethora of customers.
As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register.