California can’t hand CenturyLink a fiber stranglehold

Damage – serious market damage – will result from CenturyLink’s proposed acquisition of Level 3. The two companies argue that the new, combined operation will be a fiercer, more able combatant in the battle for business services accounts, and that might be true up to a point. But along key corridors in California and elsewhere the long haul fiber market will take a giant step toward monopoly.

A quick glance at the national footprint of the new CenturyLink tells the story. The lines are artfully drawn to make it look as if the blue Level 3 network kinda goes the same places as the yellow CenturyLink routes, but the two don’t really overlap.

Bullshit.

On the key U.S. 101 and Interstate 80 corridors in California, CenturyLink and Level 3 run down the same railroad right of ways. If you do a short (and cautious) walk at any point you choose along either, you will see fiber markers belonging mostly to four companies: CenturyLink (usually still identified as Qwest), Level 3 (sometimes with old WilTel posts), Verizon (often labeled as MCI) and AT&T. There are other companies in spots – Zayo and Sunesys/Crown Castle come to mind, and there are more – but not consistently. The long haul, intercity fiber market in California is dominated by those four companies.

Three companies. If the merger is allowed to happen exactly as proposed.

It gets worse. The problem is compounded by the deal’s structure. Level 3 is the Big Kahuna of independent middle mile fiber companies and does business with companies of all kinds on whatever basis is necessary. Including dark fiber.

CenturyLink, despite its hardscrabble roots and odd assortment of acquisitions, is now overwhelmingly a legacy Bell operating company, with a legacy Bell attitude toward iron control of assets and wringing the last nickel out of customers by refusing to sell anything but high margin managed services. Unless a regulatory gun is held to its corporate head.

Giving CenturyLink more heft in the business services sector would be a good thing in some circumstances. But not at the cost of condemning low revenue rural areas to perpetually slow and expensive bandwidth, and preventing small, flexible competitors from entering urban markets.

  • It will get worse before it gets better

    We are going to roll over and accept this AT&T / Time Warner merger, the same goes for the Level 3 / CenturyLink merger, both with very little oversight or opposition. AT&T will become communications and media giant. CenturyLink will not only be a telecommunications provider both national and international, but they will also eventually become a telecom giant as they are going to acquire the wireline from AT&T. Let’s hope that neither one implodes under the new massive debt they are taking on. The remaining badly neglected copper DSL that Verizon and AT&T are determined to rid themselves of AGAIN will be turned over to the frankensteins Windstream, Frontier and CenturyLink. Guaranteed that we the taxpayers will be on the hook for these three companies trying to maintain that existing infrastructure. We will be lucky if any meaningful upgrades happen at all.

    THIS IS WHY WE NEED STRONG REGULATION.

    We are certifiably fucked.