CenturyLink-Level 3 deal blows past key California deadline

30 August 2017 by Steve Blum
, , ,

Too late.

The already poor chance that CenturyLink would get permission from the California Public Utilities Commission to buy Level 3 Communications before the end of September took another steep nosedive yesterday. A 5:00 p.m. deadline came and went without a draft decision – yes or no – being released by the CPUC administrative law judge (ALJ) and commissioner handling the case.

In the normal course of business, proposed decisions have to go through a 30 day public review and comment process before being voted on by commissioners. To get on the commission’s 28 September 2017 agenda, a draft decision had to be posted by close of business yesterday. That didn’t happen and that means CenturyLink and Level 3 won’t get California’s blessing before their 30 September 2017 target date for closing the deal.


Unless the commission grants a Hail Mary motion for an emergency exception to the 30-day rule that CenturyLink filed one minute after yesterday’s deadline passed.

The odds of that happening are, to be generous, exceedingly slim. For three reasons.

First, it’s – let’s say unusual – to ask to shorten the review period for a proposed decision that hasn’t been issued yet. According to the rough schedule set by the commissioner in charge of the case – Martha Guzman Aceves – a draft decision isn’t even due until mid-October.

Second, the assigned ALJ, Regina DeAngelis, was very clear at a pre-hearing conference earlier this month that she thinks the 30 day review period is mandatory and rebuffed oral arguments to the contrary. It wasn’t a reach on her part, it was just conventional wisdom, particularly when a Californian proceeding continues to be challenged by officially recognised parties, as this one is.

Finally, the standard for shortening the 30 day review period is not whether it’s a matter of corporate convenience but rather if it’s a matter of public interest and it’s “an unforeseen emergency situation”. It’s hard to see how short circuiting the normal debate over a contested transaction – particularly one as bad for California’s telecoms market as the proposed CenturyLink-Level 3 hookup – is in the public interest, and even harder to believe there’s anything unforeseen happening. It’s common for fraught proceedings to run a year or more at the CPUC and it was CenturyLink’s choice to wait almost five months before formally beginning this one.

DeAngelis’ pre-hearing conference warning to CenturyLink and Level 3 is worth repeating: “I’m hoping there’s something more that the parties can do to prepare for a decision at a later date”.