Apollo/Lumen Nears Va. Clearance as State Reviews Progress

Regulatory reviews of Apollo's buying Lumen ILEC assets are moving forward in the states. Virginia State Corporation Commission staff plans to recommend approval soon, said Hearing Examiner Ann Berkebile at an evidentiary hearing livestreamed Thursday. The companies expect to finish getting state approvals in the first half of this year, they told the FCC this week.

FCC approval of the deal remains pending as several public interest organizations sought additional information and certain conditions on approval (see 2202030059). Lumen asset Telephone USA also asked the FCC to deny the application (see 2202010044). Lumen and Apollo’s Connect Holding called the request "untimely" and said the ILEC would be withdrawn from the transaction if ongoing negotiations don't reach a "successful conclusion," per a letter in docket 21-350. The companies asked the FCC to "proceed with the timely consideration and approval of the transaction." The FCC didn't comment.

Comments on Virginia staff’s coming recommendation would be due one week later, then commissioners would make the final decision, Berkebile said. Earlier in the hearing, the commission’s Senior Counsel Raymond Doggett recommended approval, citing a joint stipulation filed Friday in docket PUR-2021-00246. Lumen commitments from that pact should address service quality issues raised by several county supervisors at a webcast public hearing a day earlier, said Virginia Assistant Attorney General John Farmer.

Under the Virginia service quality settlement, the companies committed to work with staff before and after the deal closes to address problems with provision and restoration of service in four counties, “including ongoing reporting until such service-related issues have been addressed to the mutual satisfaction of the VA ILECs and the Staff.” The companies committed to meet certain metrics, statewide, for service restoration time and plant trouble. They said they will seek to “identify copper cables with a higher-than-normal occurrence of trouble” so they can be repaired or replaced. “The VA ILECs are currently focusing on 78 copper cables across 4 counties, impacting approximately 3,600 working lines.”

The Illinois Commerce Commission unanimously cleared the deal Feb. 17 (See 2202170066). Lumen reported to the FCC Monday in docket 21-350 that reviews are also complete in Georgia, Minnesota, Ohio, South Carolina and Wisconsin. The telco expects approvals by the end of Q1 in Louisiana and during first-half 2022 in Mississippi, New Jersey, Pennsylvania and Virginia.

At the Louisiana Public Service Commission, staff asked to withdrew its Feb. 16 letter in docket S-36166 that had said the proposed deal was deemed approved and needed no further commission action. Staff requested withdrawal Monday after speaking with the applicant companies’ counsel, it said: “Staff anticipates filing Staff’s position at a later time.”

Apollo and Lumen seek Pennsylvania Public Utility Commission approval “on or before” the May 26 meeting, they said in a Feb. 10 letter posted last week in docket A-2021-3028668. The companies attached a pact resolving all issues with state consumer and small business advocate offices, plus a supportive statement by the consumer office. The small business advocate planned to submit a supporting statement by Wednesday, said the companies, but the PUC hadn’t posted it by our deadline Thursday.

Under the Pennsylvania settlement, Lumen agreed to deploy fiber over five years to 190,700 residential and business locations. Lumen won’t increase stand-alone voice rates in its 2022 annual price filing and won’t increase them by more than $1 in the next two years, it said. Lumen agreed to make a low-income program and participate in the federal affordable connectivity program. If requested by either advocate office between six months after closing and 2026, Lumen will hold meetings about service quality issues. Lumen will provide stand-alone broadband for three years after closing, it said.

At the New Jersey Board of Public Utilities in docket TM21091142, the “process is ongoing, and we are still in the discovery stage but are on track to complete the review soon,” the state’s Rate Counsel Director Brian Lipman told us Wednesday. In the Mississippi Public Service Commission’s docket 21-UA-165, the only intervenor -- Charter Communications -- withdrew, and the Public Service Commission hasn’t commented or stated any objections, Lumen said in its FCC filing Monday. Lumen declined to comment.

County Supervisors Flag Outages

Multiple county supervisor board chairs complained about outages and other problems with the company formerly known as CenturyLink at the Virginia commission’s Wednesday hearing. Albemarle County’s Chair Donna Price sees “scores of service complaints,” with residents experiencing widespread outages due to failing infrastructure. She said she gets hundreds of emails about phones without dial tones.

"It is a function of luck, not performance by CenturyLink, that no Rappahannock citizen has died as a result of their conduct,” said that county board’s chair, Debbie Donehey: “That luck cannot last forever.” Some in Nelson County have been without service for 10-14 days and sometimes longer, said its board chairman, Jesse Rutherford. "It has been a very scary thing.” Warren County saw a 911 call center outage due to a flooded copper trunk, said Chairman Cheryl Cullers: Lumen technicians rarely show up quickly for repairs and sometimes tickets are closed without any work being done.

“Hold the new firm accountable,” urged Jordan Miles, Buckingham County board chair. Miles gets calls daily about problems, he said: One constituent told him outages seem to happen "every time the wind blows.”

Lumen “listened intently” to service quality concerns raised at the hearing, and will address them as soon as possible, counsel Eric Page of Eckert Seamans told the commission Thursday.

Lumen service problems “are no secret” and can affect 911 availability, said Farmer, the assistant AG. Wednesday’s testimony showed the company is “currently falling short,” he said, but the transaction may be "precisely what CenturyLink needs to make necessary improvements.”