No Halloween treat for CenturyLink-Level 3 deal in California

by Steve Blum • , , ,

CenturyLink’s proposed purchase of Level 3 Communications appears likelier than not to be delayed for months. Yesterday, the California Public Utilities Commission set a tentative schedule for completing its review of the deal, with a target date of mid-November. That would mean the two companies will have to agree to extend their self-imposed deadline of 31 October 2017 if they still want to complete the transaction.

That won’t necessarily be the case. The ruling issued by commissioner Martha Guzman Aceves yesterday is vague – in many respects – and leaves room for a faster decision. On the other hand, there’s nothing in it that would keep the process from dragging on longer.

The CPUC has to decide if allowing CenturyLink to buy Level 3 is in the public interest. Yesterday’s ruling appears to take a narrow approach to answering that question. The real problem with the deal – the damage it would do to telecoms competition in California – isn’t explicitly mentioned. Rather than taking a top to bottom look at all the issues involved, the scope of the enquiry is, for now, limited to the settlement that CenturyLink reached with some of the organisations that objected to the deal.

But not all of them. The California Emerging Technology Fund is actively opposing the settlement, arguing it doesn’t go far enough, and a VoIP company – Telnyx – jumped in at the last minute and could yet make its presence felt. So long as the transaction is being actively contested, it is difficult, if not impossible, to short cut the CPUC’s review.

There is virtually no chance that the CPUC will approve the deal before the end of September, an outcome that a CenturyLink lawyer, Norm Curtwright, last week called “almost too awful to contemplate”. The horror of blowing past Halloween must be beyond human imagination, but that’s the reality now facing CenturyLink and Level 3.