US orders divestment in CenturyLink-Level 3 deal

2 min

Washington (AFP)

The US Department of Justice said Tuesday that Level 3 Communications will have to sell networks in three American cities ahead of its planned acquisition by telecoms giant CenturyLink.

To preserve competition in US telecoms markets, the department will also require both companies to offer leased access to unused, or "dark," fiber-optic cable along 30 intercity routes before they can proceed with CenturyLink's $34 billion purchase of Level 3.

"These divestitures will ensure that consumers of such services in the affected metropolitan areas and consumers of dark fiber between the city pairs in question will continue to enjoy the benefits of competition," Assistant Attorney General Makan Delrahim, head of the department's anti-trust division, said.

On Monday, the department filed a lawsuit in the District of Columbia blocking the planned acquisition along with a proposed settlement which would allow it to proceed.

The settlement would require Level 3 to sell all assets supporting telecoms services in Albuquerque, New Mexico, Boise, Idaho and Tucson, Arizona to buyers approved by the Justice Department.

The companies will also be required to enter into 25-year leases on 24 separate strands of dark fiber on 30 routes. Dark fiber is fiber-optic cable not currently attached to electronics.

Louisiana-based CenturyLink, the third-largest US provider of wireline telecoms services after Verizon and AT&T, announced the cash and stock transaction to buy Level 3 a year ago.

Headquartered in Colorado, Level 3 is also a global communications provider offering hosting, cloud and IT services.

The transaction is also subject to review by the Federal Communications Commission.