CenturyLink puts the joint back into its venture with Level 3

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Someone at CenturyLink – or maybe Level 3 Communications – finally inhaled deeply, exhaled fully and chanted California’s national mantra: go with the flow, go with the flow. In its latest filing with the California Public Utilities Commission, CenturyLink finally admitted that the September deadline for closing its deal to buy Level 3 that it’s been puffing and huffing about, I’m sorry, huffing and puffing about isn’t a deadline at all.

Since the purchase agreement was announced last October, CenturyLink has been trying to jam it through the necessary regulatory reviews by wailing about a phoney, self-imposed deadline and falsely claiming that the deal won’t hurt competition in what passes for a broadband market in California.

A brief and pleasant walk along railroad right of ways in the Sierra Nevada, the Salinas Valley or other key Californian telecoms corridors is all it takes to put the lie to that nonsense. Typically, you’ll find four fiber optic lines in the ground owned by Level 3, CenturyLink, AT&T and Verizon. Only one of those companies – Level 3 – will lease dark fiber or sell basic wholesale connectivity services to competitive retail broadband providers or private network operators in the normal course of business. The other three are legacy incumbent telcos – the biggest three in the U.S. – with a monopoly business model that’s pretty much limited to selling bandwidth by the bit, the most profitable and expensive way possible.

If you roll Level 3 into CenturyLink, you lose the only competitive, market-based barrier to unlimited rent extraction by incumbent telcos in California’s middle mile broadband sector. That has a direct effect on retail prices and service availability, since competitive last mile providers will either have to jack up their own subscription rates or exit the business altogether.

Heading into a key hearing this week, CenturyLink clearly and honestly conceded, without its customary back pedalling and quibbling footnotes, that 30 September 2017 is no deadline at all, 31 October 2017 is only a deadline if they want it to be and the whole thing could actually wait until next year.

The CPUC has no justification for abdicating its due diligence obligations simply for the pleasure of being “extremely helpful” to a major monopolist. Its responsibility is to Californians, who rightfully expect a competitive broadband market.