Lack of strong opposition to CenturyLink's planned buy of Level 3 is "encouraging" for the deal's prospects, Cowen analyst Paul Gallant wrote investors Wednesday. He noted Incompas, which counts Level 3 as a member, "raised several concerns but also seemed open to merger approval with meaningful conditions" (see 1701240037). "We view these developments as positive for deal approval," he wrote. His key takeaways were: there are fewer opponents to CenturyLink/Level 3 than to last year's Verizon/XO, which was approved; additional parties may still file; business data service (BDS) "is the key issue"; and possible pricing and structural remedies may help close the deal. "We believe the DOJ's and FCC's main focus will be on the office buildings where CenturyLink-Level 3 would be 2-to-1 merger. CenturyLink says there are a total of 100 such buildings," he wrote. Although Incompas says that understates the competitive overlap, Gallant doesn't view BDS overlap as a deal-killer: "DOJ and FCC have approved past ILEC-CLEC mergers (CenturyLink-Qwest, Verizon-MCI, SBC-AT&T) in which the remedy for lost BDS competition was either price caps for BDS service or divestiture of facilities in discrete buildings. Either way, we believe the deal will be approved because: A) The deal appears to have at least some pro-competitive effects (e.g. CenturyLink-Level 3 as a stronger competitor to the larger AT&T and Verizon for multi-location customers); and B) Conditions like price caps and divestitures are well-established remedies in comparable mergers."

Lack of strong opposition to CenturyLink's planned buy of Level 3 is "encouraging" for the deal's prospects, Cowen analyst Paul Gallant wrote investors Wednesday. He noted Incompas, which counts Level 3 as a member, "raised several concerns but also seemed open to merger approval with meaningful conditions" (see 1701240037). "We view these developments as positive for deal approval," he wrote. His key takeaways were: there are fewer opponents to CenturyLink/Level 3 than to last year's Verizon/XO, which was approved; additional parties may still file; business data service (BDS) "is the key issue"; and possible pricing and structural remedies may help close the deal. "We believe the DOJ's and FCC's main focus will be on the office buildings where CenturyLink-Level 3 would be 2-to-1 merger. CenturyLink says there are a total of 100 such buildings," he wrote. Although Incompas says that understates the competitive overlap, Gallant doesn't view BDS overlap as a deal-killer: "DOJ and FCC have approved past ILEC-CLEC mergers (CenturyLink-Qwest, Verizon-MCI, SBC-AT&T) in which the remedy for lost BDS competition was either price caps for BDS service or divestiture of facilities in discrete buildings. Either way, we believe the deal will be approved because: A) The deal appears to have at least some pro-competitive effects (e.g. CenturyLink-Level 3 as a stronger competitor to the larger AT&T and Verizon for multi-location customers); and B) Conditions like price caps and divestitures are well-established remedies in comparable mergers."

Incompas said CenturyLink's planned buy of Level 3 could undermine competition and lead to higher prices and less fiber deployment to businesses. "Level 3 is a shining example of how competition and interconnection policy bring more innovation and better customers service to market," said Karen Reidy, vice president-regulatory affairs, in a release Tuesday noting Incompas filed comments in the FCC's review proceeding. "While we understand why an incumbent like CenturyLink would desire to acquire such an innovative network, the significant reduction in competitive choice at building locations across CenturyLink’s footprint threatens to saddle business customers with less choice and higher prices." Level 3 is an Incompas member. In its FCC comments, Incompas said eliminating a last-mile facilities-based competitor would "enable the combined company to more easily execute price squeezes to push other retail enterprise business solution providers out of the market," including for multi-location customers partially in CenturyLink's incumbent telco region. "Applicants attempt to gloss over these issues by understating buildings where they have overlaps, while overstating alternative facilities-based options for business data services at these buildings," said the filing in docket 16-403. It said the takeover "may dampen CenturyLink's plans for fiber deployments to buildings lit by Level 3," and applicants made inadequate showings on dark fiber for long-haul transport and on remaining transport providers. "Before approving this transaction, the Commission must ensure that the competitive force Level 3 has provided is not lost," Incompas said. The National Congress of American Indians asked the agency to use the review to address the lack of affordable broadband on tribal lands. "Many Native Americans reside in CenturyLink’s 14-state service territory which is home to the largest land-based, federally recognized tribal lands in the country. This merger risks lessening the incentive CenturyLink has to invest in their networks that serve Tribal lands ... as the merged entity shifts its business model to one focused on enterprise business services," said NCAI's comments. CenturyLink emailed in response: “Our nation’s telecommunications and IT infrastructure must continue to evolve quickly to meet the ever-increasing demands of government, business and consumers. Because we must meet those needs and strengthen America’s telecommunications infrastructure for the future, it is clear that this transaction is in the public interest.” Level 3 didn't comment.

Incompas said CenturyLink's planned buy of Level 3 could undermine competition and lead to higher prices and less fiber deployment to businesses. "Level 3 is a shining example of how competition and interconnection policy bring more innovation and better customers service to market," said Karen Reidy, vice president-regulatory affairs, in a release Tuesday noting Incompas filed comments in the FCC's review proceeding. "While we understand why an incumbent like CenturyLink would desire to acquire such an innovative network, the significant reduction in competitive choice at building locations across CenturyLink’s footprint threatens to saddle business customers with less choice and higher prices." Level 3 is an Incompas member. In its FCC comments, Incompas said eliminating a last-mile facilities-based competitor would "enable the combined company to more easily execute price squeezes to push other retail enterprise business solution providers out of the market," including for multi-location customers partially in CenturyLink's incumbent telco region. "Applicants attempt to gloss over these issues by understating buildings where they have overlaps, while overstating alternative facilities-based options for business data services at these buildings," said the filing in docket 16-403. It said the takeover "may dampen CenturyLink's plans for fiber deployments to buildings lit by Level 3," and applicants made inadequate showings on dark fiber for long-haul transport and on remaining transport providers. "Before approving this transaction, the Commission must ensure that the competitive force Level 3 has provided is not lost," Incompas said. The National Congress of American Indians asked the agency to use the review to address the lack of affordable broadband on tribal lands. "Many Native Americans reside in CenturyLink’s 14-state service territory which is home to the largest land-based, federally recognized tribal lands in the country. This merger risks lessening the incentive CenturyLink has to invest in their networks that serve Tribal lands ... as the merged entity shifts its business model to one focused on enterprise business services," said NCAI's comments. CenturyLink emailed in response: “Our nation’s telecommunications and IT infrastructure must continue to evolve quickly to meet the ever-increasing demands of government, business and consumers. Because we must meet those needs and strengthen America’s telecommunications infrastructure for the future, it is clear that this transaction is in the public interest.” Level 3 didn't comment.

Odds of a Republican-controlled FCC making meaningful changes to retransmission consent or undertaking other new video rules seem scant, insiders agreed. The American TV Alliance agitated earlier this month for retrans reform (see 1701090039). Chairman Tom Wheeler last year opted not to take any action on an NPRM on proposed changes to the totality of circumstances test (see 1607140047). Incompas also urged retrans reform earlier this month.

Industry parties, public interest groups and others offered generally favorable comments and recommendations on FCC Commissioner Mignon Clyburn's action plan for ensuring affordable communications access and other objectives. Wireless, wireline and satellite entities urged various actions and incentives to promote broadband deployment and adoption. A host of civil rights and consumer groups backed inmate calling service reforms and other initiatives.

Industry parties, public interest groups and others offered generally favorable comments and recommendations on FCC Commissioner Mignon Clyburn's action plan for ensuring affordable communications access and other objectives. Wireless, wireline and satellite entities urged various actions and incentives to promote broadband deployment and adoption. A host of civil rights and consumer groups backed inmate calling service reforms and other initiatives.

Democratic House Communications Subcommittee leadership of Rep. Mike Doyle, D-Pa., bodes well for the party in the new Congress, his colleagues told us Thursday after Commerce Committee Democrats selected him as subcommittee ranking member (see 1701120021). He will take over for Rep. Anna Eshoo, D-Calif., who didn’t seek the position, and he said in an interview he will focus on preserving consumer protections from the FCC net neutrality order. He has been in office since 1995.

Democratic House Communications Subcommittee leadership of Rep. Mike Doyle, D-Pa., bodes well for the party in the new Congress, his colleagues told us Thursday after Commerce Committee Democrats selected him as subcommittee ranking member (see 1701120021). He will take over for Rep. Anna Eshoo, D-Calif., who didn’t seek the position, and he said in an interview he will focus on preserving consumer protections from the FCC net neutrality order. He has been in office since 1995.

Parties offered a jumble of views on possible telecom deregulation in biennial review reply comments posted Tuesday and Wednesday in various dockets, including 16-132. Wireline and wireless telcos and others generally proposed the commission repeal numerous rules in initial comments (see 1612060072). Republican Commissioners Ajit Pai and Michael O'Rielly, who will gain the majority under incoming President Donald Trump, have voiced enthusiasm for clearing what they term "regulatory underbrush," raising the profile of the proceeding (see 1612070040 and 1611030042).