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Consumer Counsel agrees to settlement on Qwest-Century Link merger


By Mike Dennison, Gazette State Bureau

The Billings Gazette

Wednesday, November 10, 2010


HELENA — Qwest and CenturyLink, the two largest land-line telephone companies operating in Montana, have agreed to merger conditions endorsed by the Montana Consumer Counsel, likely paving the way for state regulatory approval of the companies' proposed merger.

The proposed agreement, filed late Tuesday with the state Public Service Commission, requires the two companies to file detailed information on their cost of service in Montana no later than January 2014, so regulators can see whether rates still line up with costs at that time.

Until then, current telephone rates would remain in effect.

“It's intended to allow us to see at that point whether their rates continue to be just and reasonable,” said Mary Wright, an attorney with the Consumer Counsel, which represents consumers in utility issues before the PSC.

CenturyLink, based in Monroe, La., is proposing a $10.6 billion acquisition of Qwest, which operates in 14 states. Qwest has about 217,000 telephone lines in Montana.

CenturyLink, which operates in 33 states, has 50,000 lines in Montana, mostly in the Kalispell, Polson and Whitefish areas.

A consultant hired by the Consumer Counsel said in September that without the financial filing requirements, CenturyLink and Qwest could realize substantial savings from the merger and not pass those savings on to customers in Montana.

David Gibson, Montana state president for Qwest, said Wednesday the company is “very pleased that (the Consumer Counsel) is now considering this merger to be in the public interest.”

“The Consumer Counsel had some suggestions on the merger and we thought they were pretty good ideas, and we've adopted almost everything they asked for,” he said.

Gibson said the state Department of Administration also has signed off on the merger, as the companies agreed on conditions to protect 911 emergency calling in Montana.

“I think we have a lot of momentum here going,” Gibson said. “Hopefully it's pretty straightforward after this.”

The state PSC must decide whether to accept the various agreements on the merger and grant its final approval. A hearing on the Qwest-CenturyLink merger in Montana is scheduled to begin Nov. 22.

For the merger to go forward, the two companies need approval from utility regulators in the various affected states.

Qwest also has reached an agreement with Integra Telecom, which operates a local telephone “exchange” or company in Montana, stating that the merged CenturyLink-Qwest company would not change current charges for Integra to use Qwest's lines for transmitting voice or data.

Gibson said the agreement with Integra states that other local telecoms and cooperatives that buy wholesale space on Qwest or CenturyLink lines will get the same deal.

Once the merger is complete, Qwest will become a wholly owned subsidiary of CenturyLink, but current services and prices will remain the same, Gibson said.

It's not yet known whether the combined company will change its name, he said. The agreement with the Consumer Counsel says if any name-change occurs, affected customers will be notified.