End in Sight for Embarq-CenturyTel Merger Deliberation
The FCC is getting close to approving the Embarq- CenturyTel merger, and an order probably will circulate this week, a commission official told us on Tuesday. People in the office of acting Chairman Michael Copps have held several meetings with Embarq and CenturyTel in the past week, and the companies submitted a revised list of “voluntary commitments” Friday (CD June 23 p6). The companies have received the rest of the approvals for the deal.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Copps’ office seems largely satisfied with the commitments submitted by the companies, the FCC official said. Historically, the commission has incorporated these kinds of concessions into orders as conditions. The new commitments seem designed to appease competitive local exchange carriers that have fought the merger. For example, the companies agreed to maintain ADSL offerings and prices and not to file a forbearance petition on unbundling or special access pricing flexibility for 12 months.
CLECs believe the commitments represent a marked improvement over those that Embarq and CenturyTel offered in April and that competitors criticized as “porous and vague,” said John Heitmann, a CLEC attorney with Kelley Drye. But “fine tuning” is still needed, he said. CLECs also want the FCC to impose a cap on the combined company’s special access rates, he said.
While the commitments may address many CLEC concerns, there remain unresolved issues for others in the industry, a cable attorney said. In particular, the lawyer said it’s “disappointing” the commitments don’t address CenturyTel’s practice of charging companies for processing of phone number porting requests.
Once an order is circulated, little resistance is expected from the other commissioners, industry sources said. Commissioner Robert McDowell should be an “easy sell” if the order imposes no conditions other than voluntary commitments, said a telecom lawyer monitoring the merger. Commissioner Jonathan Adelstein will probably also be on board, since on previous mergers he has been on Copps’ wavelength.
Only a fast confirmation of presumptive incoming Chairman Julius Genachowski could delay approval, the telecom attorney said. When Genachowski arrives, Adelstein will leave the commission and Copps will step down as chairman. If Genachowski is confirmed before the commission votes, he probably will want to thoroughly review the merger before approving it, the lawyer said.