The question here is whether CenturyTel, which is at least more like a real telecom company than Qwest was in the bubble era, can make something of a symbiosis here. Qwest’s profit margin is much lower than CenturyTel’s margins, and the territory isn’t a super prospect for near-term exploitation of opportunity. Still, the move creates a real third competitor in the US telco world, which probably wasn’t possible any other way.

The story is that the growth in the future will come from business services, but we think that unless it plans to get into cloud computing services or something at a higher layer, Level 3’s experience shows that there’s not much room for enterprise growth.

This issue has received a bit of negative publicity, but from what we hear the issue is simply one of clarification. One RBOC executive told us that if the use of grant money on a single hypothetical line were to create a broadband unbundling obligation through their whole region, they’d surely not be interested. We doubt, and most RBOCs doubt, that is the interpretation intended, but they want to be sure before moving forward. This demonstrates how vulnerable broadband investment is to the issues of wholesaling, and clearly that should be considered in any rules and legislation involving broadband deployment.