Private-equity fund to buy CenturyLink; analysts say deal will keep rural internet speeds slow

The parent company of CenturyLink, the provider of phone and DSL services to the Outer Banks and most of eastern North Carolina, is selling its assets to a private-equity fund which some tech analysts say will further delay getting higher internet speeds to rural areas.

The company that recently rebranded to Lumen is selling its copper-wired residential and business assets in 20 states to Apollo Funds for $7.5 billion while assuming $1.4 billion of debt in a deal that will close in the second half of 2022.

Apollo will acquire CenturyLink’s local fiber and copper network, broadband and voice for consumer, enterprise and wholesale customers, fiber and copper connectivity to enabled buildings, connectivity to tower sites and central offices.

The networks in the pending sale have 1.3 million CenturyLink Internet subscribers, nearly all on copper-based DSL. About 59,000 of those subscribers are on fiber.

The deal will not include Lumen large enterprise or competitive local exchange carrier operations in North Carolina, Virginia and 18 other states in the southeast and midwest.

On a conference call with investors, Lumen CEO Jeff Storey said that 70 percent of the markets that Lumen will retain in the deal are in urban and suburban areas and that those are the types of markets in which Lumen was most likely to invest in upgrading broadband service to its fiber-based offering known as Quantum, Telecompetitor reported Tuesday.

In the states where CenturyLink networks are being sold, Storey said, “we knew that we were unlikely to prioritize investment in these markets ahead of our other opportunities in enterprise and Quantum fiber.”

The sale could continue a long-term trend of DSL customers in rural areas being denied fiber upgrades while old copper networks fall into disrepair, ASR Technica reports.

CenturyLink won’t be likely to upgrade networks that it’s already agreed to sell but will continue to operate them for another year.

How much fiber deployment Apollo will undertake isn’t clear, but the company said the firm’s investment “will help accelerate the upgrade to fiber optic technologies, bringing faster and more reliable Internet service to many rural markets traditionally underserved by broadband providers, while delivering best-in-class customer service.”

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Sam Walker was news director for, Beach 104, 99.1 The Sound, Big 94.5 WCMS and Z 92.3 from August 2011 to March 2022.