CenturyLink-Level 3: A $34 billion deal that creates a global fiber powerhouse, threatening AT&T, Verizon

CenturyLink confirmed its $34 billion purchase of Level 3 Communications this morning, a move that will create arguably the third largest domestic enterprise service player and threaten AT&T and Verizon – two providers that have enjoyed their stance as dominant global enterprise service players for decades.

News of the acquisition comes after a report emerged that the service providers were in the final talks to merge. By purchasing Level 3, CenturyLink will get access to global providers that have established relationships with multinational companies that have assets in multiple countries. The combination would also far surpass cable’s enterprise ambitions, which have only begun as of late following their initial small- to medium-sized business play. Now that the deal has been confirmed, a number of questions linger. CenturyLink will face a large integration project of not only the physical assets, but also people. At the end of the deal, the new company may have to conduct layoffs -- a complex proposition, since CenturyLink has a large unionized workforce. Brian Washburn, service director of global Business Network and IT services for Current Analysis, said that while issues could come up, they are not impossible to overcome. “There may be concerns about the national fiber footprint (CTLK and LVLT -- with XO -- own two of the three major ULH DWDM capable national fiber footprints built in the 1990s,” Washburn said. “We might see some building address divestment, too. But I think these are both surmountable.”