Qwest/CenturyLink Merger

Status
Prior
Docket Number
T-04190A-10-0194
T-20443A-10-0194
T-03555A-10-0194
T-03902A-10-0194
T-01051B-10-0194
T-02811B-10-0194
Assigned Staff
J. Jerich
D. Pozefsky
W. Rigsby

 

On Thursday, May 13, 2010, Qwest Corporation, Qwest Communications Company, LLC, Qwest LD Core’., Embarq Communications, Inc. d/b/a Century Link Communications, Embarq Payphone Services, Inc. d/b/a CenturyLink and CenturyTel Solutions, LLC filed ajoint application(link is external) ("Application") with the Arizona Corporation Commission ("ACC" or "Commission") seeking approval of a merger ("Proposed Merger") of their parent corporations Qwest Communications International Inc. ("Qwest") and CenturyLink, Inc. ("CenturyLink").

Denver, Colorado-based Qwest serves a fourteen-state region and is the dominant incumbent local exchange carrier in Arizona.  Qwest(link is external) provides telecommunications services in and around Phoenix, Tucson, Flagstaff, Yuma, Prescott, Winslow Nogales and Safford. CenturyLink(link is external) is headquartered in Monroe, Louisiana and is the fourth largest telephone company in the U.S.  CenturyLink serves thirty-three states including Nevada, where it is the incumbent local exchange carrier in Las Vegas.

Under the terms of the proposed merger agreement, Qwest will become a wholly-owned, first tier subsidiary of CenturyLink.  Since the transaction is a combination of the parent companies only, local exchanges, companies, or assets will not be sold, combined or transferred to a new provider according to the Joint Application. 

Qwest/CenturyLink filed its direct testimony(link is external) on the proposed merger on Monday, May, 24, 2010.

On Wednesday, June 2, 2010, RUCO filed a motion to intervene(link is external).

On Thursday, July 1, 2010, The Administrative Law Judge ("ALJ") assigned to the case issued a Procedural Order(link is external) which granted RUCO's request for intervenor status and scheduled the evidentiary hearing in the matter for 10:00 a.m. on Monday, November 15, 2010 at 1200 W. Washington in Phoenix.

On September 21, 2010, ACC Staff filed a Request for an Extension of Time to File(link is external) its direct testimony until October 12, 2010.  ACC Staff stated that it would like the additional time in order to review all parties’ initial testimony before filing its direct testimony. Staff stated in its request that the extension would allow it to monitor the positions of other State commissions' staff in Qwest's 14 state service areas and take into account those positions when preparing its testimony.

On Friday, September 24, 2010 the ALJ assigned to the case issued a procedural order(link is external)granting ACC Staff's request.

On Monday, September 27, 2010, RUCO filed its direct testimony(link is external) recommending that the Proposed Merger be approved by the ACC on condition that Arizona ratepayers be shielded from any integration/acquisition costs that the combined Qwest/CenturyLink entity may attempt to pass on to them.

Rebuttal testimony(link is external) from Qwest/CenturyLink was filed on Wednesday, October 27, 2010.  RUCO filed surrebuttal testimony(link is external) on Wednesday, November 10, 2010.

The evidentiary hearing on the matter began as scheduled on Monday, November 15, 2010.  After public comment was taken, the ALJ assigned to hear the matter agreed to delay the hearing in order to give the parties to the case time to reach a global settlement on the forty-seven conditions for merger recommended by ACC Staff.

On Friday, November 19, 2010, the ALJ was informed that a settlement agreement ("Proposed Settlement Agreement") had been reached between ACC Staff, RUCO, Qwest and CenturyLink.

Over the course of the proceeding, Qwest and CenturyLink had also entered into settlement agreements with the Communications Workers of America, the Department of Defense, Integra Telecom, Inc., Cox Arizona Telecom and Westel, Inc.

On Tuesday, November 23, 2010, the ALJ assigned to the case issued a Procedural Order(link is external) that vacated the remaining hearing dates on the litigation proceeding and  scheduled the evidentiary hearing on the Proposed Settlement Agreement for 10:30 a.m. on Monday, December 13, and Monday, December 20, 2010 at 1200 W. Washington in Phoenix.

On Friday, November 26, 2010, a copy of the Proposed Settlement Agreement(link is external) was filed with the Commission.

On Wednesday, December 1, 2010, RUCO filed testimony in support of the Proposed Settlement Agreement(link is external) that that seeks Commission approval of the merger of Qwest and CenturyLink. 

Testimony in opposition to the Settlement Agreement was filed on Wednesday, December 8, 2010.

The evidentiary hearing on the proposed merger concluded on Tuesday, December 21, 2010 at 1200 W. Washington in Phoenix.

On Tuesday, January 18, 2011, RUCO filed its closing legal brief on the proposed merger recommending that the Arizona Corporation Commission approve the settlement agreement reached by Qwest, CenturyLink, ACC Staff and RUCO.

After weighing all of the evidence presented during the proceeding, the ALJ assigned to the case issued a Recommended Opinion and Order(link is external) ("ROO") on Tuesday, February 15, 2011. 

The ALJ recommended that the proposed merger be approved subject to certain additions and clarifications of the terms and conditions contained in the Settlement Agreement.  The ALJ also recommended that the merger be approved subject to the terms and conditions contained in other settlement agreements entered into with Qwest and CenturyLink by 360networks, Communications Workers of America, Department of Defense - Federal Executive Agencies, Integra Telecom, Cox Arizona Telecom, TW Telecom of Arizona, and Westel, Inc.

Exceptions to the ALJ's recommendations were filed by Qwest and competitive local exchange carrier PAETEC, on Thursday, February 24, 2011.

During the Regular Open Meeting held on Tuesday, March 1, 2011 at 1200 W. Washington in Phoenix, the five members of the ACC approved the proposed merger by a vote of 5-0.