The U.S. Department of Justice on Tuesday cleared CenturyLink in its $34 billion deal to buy Broomfield’s Level 3 Communications but only if it met additional conditions to maintain competition in more than 30 cities nationwide.
CenturyLink must offer long-term leases for dark fiber connecting 30 cities and sell off Level 3’s metro network assets in Albuquerque, N.M., Boise, Idaho, and Tucson, Ariz. The additional conditions came as the department’s antitrust division filed a civil antitrust lawsuit on Monday to block the acquisition.
“Because of competition between CenturyLink and Level 3, consumers have benefited from lower prices and higher-quality services in local telecommunications services and in the sale of intercity dark fiber,” Makan Delrahim, assistant attorney general of the antitrust division, said in a statement. “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.”
Dark fiber, which refers to the internet lines that are installed but not in use, is typically saved for future expansion or leased to other companies to build their own internet service. According to the Justice Department, CenturyLink needs to offer long-term leases of 25 years plus two renewals of five years. The 30 intercity routes are in the states of Alabama, Arizona, California, Colorado, Florida, Georgia, Indiana, Kansas, Louisiana, Missouri, Nevada, New York, North Carolina, Ohio, Oregon, Tennessee, Texas, Utah, and Virginia.
CenturyLink said that selling off such assets is not expected to affect its bid for Level 3, which is expected to be completed by the end of this month.
“We anticipate court approval of our agreed resolution with the Department of Justice as early as this week,” John F. Jones, CenturyLink Senior Vice President for Public Policy and Government Relations said in a statement.
The acquisition has the OK from 24 of 25 states and territories. The last one, California, is expected next week. The deal also needs approval from the Federal Communications Commission.