CenturyLink buys Level3; Implications for Comcast

Tom Paine

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Level3 campus

CenturyLiink's proposed $34 billion (including assumption of debt) acquisition of internet backbone provider Level3 Communications has implications for Comcast, from both sides.

In July, Comcast was widely rumored to be considering buying Level3, but those turned out to be just rumors. Not that it might not have been on Comcast's radar.

Broomfield, Colorado-based Level3 is a Tier 1 provider of core transport, IP, voice, video, and content delivery. Its a major carrier of traffic to and from Comcast's network.

Level3 also could have also strengthened Comcast's business communications services capabilities for large enterprises, and added to its fiber network for wireless backhaul.

Monroe, La-based CenturyLink, which also has an extensive fiber network, had its roots in the local telco business. CenturyLink also has a pay TV service called Prism, with only 311,000 subscribers, which competes with Comcast in some areas. CenturyLink has also been conducting a pilot for a skinny bundle over-the-top service called Prism Stream.

Comcast and Level3 had a long-running dispute over peerage costs, and Level3's complaints that Comcast was discriminating against traffic from Netflix, a major Level3 customer. But things have been relatively peaceful since the two firms reached a long-term agreement last year.

The combination would increase CenturyLink's fiber network in the United States to 450,000 miles from about 250,000.

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