Competitors Oppose CenturyTel-Embarq Merger

CompTel asked the FCC to reject the merger, saying the midsized incumbents haven’t shown their deal to be in the public interest. CompTel members are competitors and customers of Embarq and CenturyTel. A merger would increase the incumbents’ control over interconnection and special- access terms, CompTel said. “The Commission has recognized that the merger of two incumbent LECs ordinarily increases the potential for harm to competition because the merger would ‘increase the incentives and ability of the merged entity to discriminate against rivals,'” it said.

CLECs NuVox and Socket Telecom agreed, in joint comments: “The public interest statement offered by the Applicants includes little more than a press release quality overview ticking-off buzzwords like ‘efficiencies’ and popular ideas like improving service to rural areas. Hoped-for synergies, good intentions and nice ideas do not equate to tangible benefits.”

Wholesale arrangements with Embarq may be impaired if CenturyTel takes over, NuVox and Socket said. “CenturyTel lacks the wholesale support infrastructure, commitment and experience necessary to serve wholesale customers as required and as is necessary to ensure robust competition and the consumer benefits that flow from it,” they said. “There is good reason to believe that comparatively better practices and capabilities in place at Embarq will be replaced with those CenturyTel uses to stymie competition in its service areas.” But the New Jersey Division of Rate Counsel said it’s the Embarq side that needs improvement. “CenturyTel installs and repairs basic local service more expeditiously than does Embarq,” it said.

If the FCC approves the merger, it should impose four interconnection conditions adopted in the AT&T-BellSouth merger, CompTel said. Chief among the requirements is that the merged company allow competitive carriers to port “any interconnection agreement with any of the merging carrier’s ILECs in any State to any other State served by either ILEC - - subject to State-specific pricing and performance measures,” CompTel said. The FCC should also impose the multistate agreement condition from the SBC-Ameritech and Bell Atlantic-GTE mergers, CompTel said: The merged company “would agree, upon request, to negotiate an interconnection agreement covering some or all of the States where the merged firm operates.”

CompTel also asked the FCC to apply an unprecedented requirement that the merged company on request offer one interconnection rate in each state. This “unique condition” is needed because after the merger the company “will operate at least 80 different ILECs in 33 different States,” CompTel said. “While prices may vary by state, competitive carriers and consumers should not be penalized by Applicants’ decision to maintain an archaic and redundant corporate structure which results in price variations within many States.”

The FCC should impose at least some of the special access conditions from the AT&T-BellSouth merger, CompTel said. “As in prior mergers, the Commission should ensure that the merger does not result in rate increases for these critical services, which are already extraordinarily overpriced.”

Meanwhile, the New Jersey government office urged the FCC require broadband deployment throughout the merged company’s territory. The FCC should demand “a concrete plan to reach all consumers in the Applicants’ combined territories by the end of the first year following completion of the merger,” the office said. The FCC should also require the companies to provide “detailed maps showing where in their territories broadband service is presently available,” it said. And the companies should commit to offering discount broadband service to Lifeline customers, it said.