−Removed: Business Overview and Purpose
−Removed: We are a networking company with the goal of connecting people, data, and applications quickly, securely and effortlessly.
+Added: Business Overview
+Added: We are a leading digital networking services company, empowering enterprise businesses to fuel growth in a multi-cloud, AI-first marketplace by connecting people, data, and applications quickly, securely, and effortlessly.
We are unleashing the world's digital potential by providing a broad array of integrated products and services to our domestic and global Business customers and our domestic Mass Markets customers.
−Removed: We report our revenue derived from our operations serving our Mass Markets customers, primarily within the 'Other Broadband', 'Voice and Other' and 'Fiber Broadband' categories and our revenue derived from our operations servicing our Business customers, primarily within the 'Harvest', 'Nurture' and 'Grow' categories.
−Removed: Our specific products and services are detailed below under the heading "Operations - Products and Services."
−Removed: Our ultimate parent company, Lumen Technologies, Inc., has cash management arrangements or loan arrangements with a majority of its subsidiaries that include lines of credit, affiliate obligations, capital contributions and dividends.
−Removed: As part of these cash management or loan arrangements, affiliates provide lines of credit to certain other affiliates.
−Removed: Amounts outstanding under these lines of credit and intercompany obligations vary from time to time.
−Removed: Under these arrangements, the majority of our cash balance is advanced on a daily basis for centralized management by Lumen's service company affiliate.
−Removed: From time to time we may declare and pay dividends to Qwest Services Corporation ("QSC"), our direct parent, using cash owed to us under these advances, which has the net effect of reducing the amount of these advances.
−Removed: We report the balance of these transfers on our consolidated balance sheet as advances to affiliates.
−Removed: We were incorporated under the laws of the State of Colorado in 1911.
−Removed: Our principal executive offices are located at 931 14th Street, Denver, Colorado 80202 and our telephone number is (318) 388-9000.
−Removed: For a discussion of certain risks applicable to our business, see “Risk Factors” in Item 1A of Part I of this report.
−Removed: The summary financial information in this Item 1 should be read in conjunction with, and is qualified by reference to, our consolidated financial statements and notes thereto in Item 8 of Part II of this report and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II of this report.
−Removed: Financial Highlights
−Removed: The following table summarizes the results of our consolidated operations:
−Removed: Years Ended December 31,
−Removed: (Dollars in millions)
−Removed: Operating revenue $ 5,508 5,915 6,449
−Removed: Operating expenses 3,457 6,110 3,694
−Removed: Operating income (loss)
−Removed: $ 2,051 (195) 2,755
−Removed: Net income (loss)
−Removed: $ 1,487 (831) 1,919
−Removed: _______________________________________________________________________________
−Removed: (1) During 2023 we recorded non-cash, non-tax-deductible goodwill impairment charge of $2.4 billion.
−Removed: For additional information, see Note 2—Goodwill And Other Intangible Assets to our consolidated financial statements in Item 8 of Part II of this report.
−Removed: The following table summarizes certain selected financial information from our consolidated balance sheets:
−Removed: As of December 31,
−Removed: (Dollars in millions)
−Removed: Total assets $ 17,362 16,337
−Removed: Total long-term debt (1)
−Removed: Total stockholder's equity 12,243 10,756
−Removed: _______________________________________________________________________________
−Removed: (1) Total long-term debt does not include note payable-affiliate.
−Removed: For additional information on our total long-term debt, see Note 6—Long-Term Debt and Note Payable - Affiliate to our consolidated financial statements in Item 8 of Part II of this report.
−Removed: For information on our total obligations, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Future Contractual Obligations" in Item 7 of Part II of this report.
−Removed: Substantially all of our long-lived assets are located in the United States and substantially all of our total consolidated operating revenue is from customers located in the United States.
−Removed: The summary financial information appearing above should be read in conjunction with, and is qualified by reference to, our consolidated financial statements and notes thereto in Item 8 of Part II of this report and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II of this report.
−Removed: For the reasons noted in Note 1—Background and Summary of Significant Accounting Policies to our consolidated financial statements in Item 8 of Part II of this report, we believe we have one reportable segment.
+Added: We operate one of the world’s most interconnected communications networks.
+Added: Our platform empowers our customers to swiftly adjust digital programs to meet immediate demands, create efficiencies, accelerate market access, and reduce costs, which allows our customers to rapidly evolve their IT programs to address dynamic changes.
+Added: Our specific products and services are detailed below under the heading “Products and Services.”
+Added: On May 21, 2025, we and certain of our affiliates entered into a definitive agreement to sell our Mass Markets Fiber-to-the-Home business in 11 states (the "Territory") to AT&T.
+Added: On February 2, 2026, we completed our sale of our Mass Fiber-to-the-Home business in the Territory ("Mass Markets Fiber-to-the-Home business") to AT&T in exchange for gross cash proceeds of $5.75 billion, subject to post-closing adjustments (the "Mass Markets Fiber-to-the-Home divestiture").
+Added: Cash Management and Intercompany Arrangements
+Added: Our ultimate parent company, Lumen Technologies, Inc., maintains cash management and intercompany financing arrangements with many of its subsidiaries, including us.
+Added: Under these arrangements, most of our cash is advanced daily to Lumen's service company affiliate for centralized management, with intercompany balances settled as needed.
+Added: We may also periodically declare and pay dividends to our direct parent, Qwest Services Corporation ("QSC"), which can affect these balances.
+Added: Additional information regarding these arrangements is provided in Note 1—Background and Summary of Significant Accounting Policies in Item 8 under the heading "Affiliate Transactions."
+Added: Reporting Segment
+Added: For the reasons noted in Note 1—Background and Summary of Significant Accounting Policies to our consolidated financial statements in Item 8, we believe we have one reportable segment.
+Added: Our Stakeholders
+Added: We believe that regular communications with our stakeholders is a vital component of our success.
+Added: Our "North Star" strategy focuses on the operating principles of teamwork, trust, and transparency and infuses clarity into the communications we have with all of our stakeholders, including our investors, employees, customers, vendors, partners, and our local communities.
+Added: Employees and Human Capital Resources
+Added: To drive growth and success, we’ve strengthened our senior leadership team, modernized our business, and energized our culture.
+Added: We strive to attract, develop, and retain a workforce that is inspired by strong leadership, engaged in meaningful work, and motivated by career growth opportunities.
+Added: Our goal is to foster a culture where teamwork, trust, and transparency empower thriving employees to achieve both individual and collective success.
+Added: We aim to attract broad talent to develop innovative ideas that transform industries worldwide.
+Added: As of December 31, 2025, we had approximately 9,100 employees, of which approximately 43% are members of either the Communications Workers of America ("CWA") or the International Brotherhood of Electrical Workers ("IBEW").
+Added: See "Risk Factors— Business Risks" in Item 1A and Note 17—Labor Union Contracts in Item 8 for a discussion of risks relating to our labor relations and for additional information on the timing of certain contract expirations.
+Added: Sales and Marketing
+Added: Our enterprise sales and marketing approach focuses on solving complex customer problems with advanced technology and network solutions, striving to make core networks services compatible with digital tools.
+Added: We also rely on our call center personnel and a variety of channel partners to promote sales of services that meet the needs of our customers.
+Added: To meet the needs of different customers, our offerings include both stand-alone services and bundled services designed to provide a complete offering of integrated services.
+Added: Our Business customers range from small business offices to select enterprise customers.
+Added: Our direct sales representatives generally market our business services to members of in-house IT departments or other highly-sophisticated customers with deep technological experience.
+Added: These individuals typically satisfy their IT requirements by contracting with us or a rapidly evolving group of competitors, or by deploying in-house solutions.
+Added: We also market our products and services through inbound call centers, telemarketing and third parties, including telecommunications agents, system integrators, value-added resellers and other telecommunications firms.
+Added: We support our distribution through digital advertising, events, website promotions and public relations.
+Added: We maintain local offices in most of the larger population centers within our local service area.
+Added: These offices provide sales and customer support services to the communities in our local markets.
+Added: We generally market our business services to members of in-house IT departments or other highly-sophisticated customers with deep technological experience.
+Added: These individuals typically satisfy their IT requirements by contracting with us or a rapidly evolving group of competitors, or by deploying in-house solutions.
Products and Services
−Removed: While most of our customized customer interactions involve multiple integrated technologies and services, we organize our products and services according to the core technologies that drive them.
−Removed: At December 31, 2024, we reported our revenue derived from our operations serving our Mass Markets customers, primarily within the first three categories listed below, and our revenue derived from our operations servicing our Business customers, primarily in the 'Harvest', 'Nurture' and 'Grow' categories listed below:
−Removed: • Other Broadband , under which we provide primarily lower speed broadband services to residential and small business customers utilizing our copper-based network infrastructure;
−Removed: • Voice and Other, under which we derive revenues from (i) providing local and long-distance services, professional services, and other ancillary services, (ii) federal broadband and state support payments, and (iii) equipment, IT solutions and other services;
−Removed: • Fiber Broadband , under which we provide high speed broadband services to residential and small business customers utilizing our fiber-based network infrastructure;
−Removed: • Grow, which includes products and services in which we are significantly investing, primarily including:
+Added: While most of our customized customer interactions involve multiple integrated technologies and services, we structure our products and services according to the core technologies that drive them.
+Added: As of December 31, 2025, we reported our revenue derived from our operations serving our Mass Markets customers, primarily within the first three categories listed below, and our revenue derived from our operations servicing our Business customers, primarily in the 'Harvest', 'Nurture' and 'Grow' categories listed below:
+Added: • Other Broadband :
+Added: Under which we provide primarily lower speed broadband services to residential and small business customers utilizing our copper-based network infrastructure;
+Added: • Voice and Other :
+Added: Under which we derive revenues from (i) providing local and long-distance services, professional services, and other ancillary services, (ii) federal broadband and state support payments, and (iii) equipment, IT solutions and other services;
+Added: • Fiber Broadband :
+Added: Under which we provide high speed broadband services to residential and small business customers utilizing our fiber-based network infrastructure;
+Added: Includes products and services that we anticipate will grow, including:
◦ Optical Services :
We deliver high bandwidth optical wavelength networks to customers requiring an end-to-end solution with ethernet technology for a scalable amount of bandwidth connecting sites or providing high-speed access to cloud computing resources.
−Removed: • Nurture, which includes our more mature offerings, such as:
+Added: Includes our more mature offerings, such as:
We deliver a robust array of networking services built on ethernet technology.
1 unchanged sentence
Our ethernet technology is also used by wireless service providers for data transmission via our fiber-optic cables connected to their towers.
−Removed: • Harvest, which includes our legacy services managed for cash flow, including:
+Added: Includes our legacy services managed for cash flow, including:
◦ Voice Services :
8 unchanged sentences
From time to time, we may change the categorization of our products and services.
−Removed: Our and Lumen's network, through which we provide most of our products and services, consists of fiber-optic and copper cables, high-speed transport equipment, electronics, voice switches, data switches, routers, and various other equipment.
−Removed: We operate part of our network with leased assets, and a substantial portion of our equipment with licensed software.
+Added: We deliver most of our products and services through our network, together with Lumen's, which is primarily built on fiber-optic cables and supporting equipment.
+Added: Portions of our network use leased assets, and much of the equipment uses licensed software.
+Added: Strategic Investments and Modernization
We and Lumen view our network as one of our most critical assets.
−Removed: We and Lumen have devoted, and plan to continue to devote, substantial resources to (i) simplify and modernize our network and legacy systems (ii) retire aging or obsolete systems and plant and (iii) expand our and Lumen’s network to address demand for enhanced or new products.
−Removed: A key element of our network expansion plan is our Quantum Fiber buildout project.
−Removed: Under this project, we plan to construct additional fiber optic infrastructure over the next years to enable us to provide Quantum Fiber broadband services to several million additional urban and suburban locations in our ILEC markets.
−Removed: Although either we or Lumen own most of our network, we lease a substantial portion of our fiber network from several other communication companies under arrangements that will periodically need to be renewed or replaced to support our current network operations.
−Removed: As a critical infrastructure provider, we and our customers are a constant target of cyber-attacks from a wide range of intruders, including advanced persistent threat actors.
−Removed: From time to time in the ordinary course of our business we experience security incidents and disruption in our services.
−Removed: We develop and maintain systems and programs designed to protect against cyber-attacks and network outages.
−Removed: The development, maintenance and operation of these systems and programs is costly and requires ongoing monitoring and updating as technologies change and efforts to bypass security measures become more sophisticated and evolve rapidly.
−Removed: For additional information regarding risks relating to our systems, network assets, network operations, capital expenditure requirements and reliance upon third parties, see "Risk Factors," in Item 1A of Part I of this report.
−Removed: We compete in a dynamic and highly competitive market in which demand for high-speed, secure data services continues to grow.
−Removed: We expect continued intense competition from a wide variety of sources under these evolving market conditions.
−Removed: In addition to competition from large communications providers, we are facing competition from a growing number of sources, including, systems integrators, hyperscalers, cloud service providers, software networking companies, infrastructure companies, cable companies, wireless service providers, device providers, resellers and smaller niche providers.
−Removed: Our ability to compete hinges upon effectively enhancing and better integrating our existing products, introducing new products on a timely and cost-effective basis, meeting changing customer needs, providing high-quality information security to build customer confidence and combat cyber-attacks, extending our core technology into new applications and anticipating emerging technological and industry changes.
−Removed: Depending on the applicable market and services, competition can be intense, especially if competitors in the market have network assets better suited to customer needs, offer faster transmission speeds, charge lower prices, or have a longer history of providing service in the market.
−Removed: We compete to provide services to Business customers based on a variety of factors, including the comprehensiveness and reliability of our network, our data transmission speeds, price, the latency of our available network services, the scope of our integrated offerings, the reach and peering capacity of our IP network, digital ordering capabilities, ease of access and use, billing simplicity and customer service.
−Removed: We continue to experience pricing pressure for several of our products and services due to a wide array of large communications companies and systems integrators providing high-speed fiber services to enterprise and wholesale business customers and other companies that market slower-speed non-fiber services typically at lower prices to more price-sensitive customers.
+Added: We and Lumen have devoted — and will continue to devote — significant resources to maintain, modernize, and expand it.
+Added: Key efforts include:
+Added: • simplifying and modernizing our network and legacy systems;
+Added: • retiring aging and obsolete infrastructure and systems;
+Added: • expanding our network to meet growing demand for enhanced and new products.
+Added: We sold a portion of our network on February 2, 2026, as discussed in Note 2—Divestiture in Item 8.
+Added: Leased Network Assets
+Added: Although either we, Lumen, or one of the Lumen's affiliates own most of our network, we lease a substantial portion of our fiber network from several other communication companies under arrangements that will periodically need to be renewed or replaced to support our current network operations.
+Added: Cybersecurity and Network Resilience
+Added: As a critical infrastructure provider, we and our customers face ongoing cyber threats, including advanced persistent threat actors.
+Added: We experience occasional security incidents and service disruptions in the ordinary course of business and maintain robust systems to mitigate these risks.
+Added: The development, maintenance, and operation of these systems and programs require significant investments and continuous updates to address evolving threats.
+Added: For additional information regarding our oversight of cybersecurity matters, see "Cybersecurity" in Item 1C, and regarding risks relating to our systems, network assets, network operations, capital expenditure requirements and reliance upon third parties, see "Risk Factors," in Item 1A.
+Added: We compete in a dynamic and highly competitive market where demand for high-speed, secure data services continues to grow.
+Added: Our competitors include global communications providers as well as systems integrators, hyperscalers, cloud service providers, software networking companies, infrastructure companies, cable companies, wireless service providers, device providers, resellers, and smaller niche providers.
+Added: Intense competition is expected to continue across a wide range of industry participants amid the evolving market landscape.
+Added: Our ability to compete and succeed in this competitive environment depends on:
+Added: • enhancing and integrating existing products;
+Added: • introducing new offerings quickly and cost-effectively;
+Added: • meeting changing customer needs;
+Added: • delivering robust information security to build trust and mitigate cyber threats;
+Added: • extending our core technologies into new applications;
+Added: • anticipating industry and technology shifts.
+Added: Competitive pressures are particularly strong when rivals have network assets better suited to customer needs, faster transmission speeds, lower prices, or a longer track record in the market.
+Added: Business Customers
+Added: We compete for enterprise and wholesale customers based on factors such as:
+Added: • network reliability and comprehensive coverage;
+Added: • data transmission speed and latency;
+Added: • pricing and billing simplicity;
+Added: • integrated service offerings;
+Added: • IP network reach and peering capacity;
+Added: • digital ordering capabilities and ease of use;
+Added: • customer service quality.
+Added: Pricing pressure remains significant as large communications companies and system integrators deliver high-speed fiber services, while other companies target price-sensitive customers with lower-cost, slower-speed non-fiber alternatives.
+Added: Mass Markets Customers
+Added: Broadband Services
Competition to provide broadband services to our Mass Markets customers remains high.
−Removed: Market demand for our broadband services could be adversely affected by (i) advanced wireless data transmission technologies, including fixed wireless and low-earth-orbit satellite services, and (ii) continued enhancements to cable-based services, each of which generally provides faster average broadband transmission speeds than our copper-based infrastructure.
−Removed: In addition, several established or new communications companies, infrastructure companies or municipalities have built or are building new fiber-based networks to provide high-speed broadband services in existing or unserved markets, frequently with the support of governmental subsidies.
−Removed: Our network expansion and innovation strategy is focused largely on addressing these competitive pressures.
−Removed: To meet these demands and remain competitive, we are continuing to invest in network capacity, security, reliability, flexibility and design innovations, including through our Quantum Fiber buildout initiatives.
−Removed: For our traditional voice services, providers of wireless voice, social networking, videoconferencing, and electronic messaging services are significant competitors as many customers are increasingly using these services to communicate, resulting in the long-term systemic decline in our traditional voice services.
−Removed: Other potential sources of competition include non-carrier systems that are capable of bypassing our local networks, either partially or completely, through various means.
−Removed: Developments in software have permitted new competitors to offer affordable networking products that historically required more expensive hardware investment.
+Added: Market demand for our broadband services could be adversely affected by:
+Added: • advanced wireless data transmission technologies (e.g., fixed wireless and low-earth-orbit satellites services);
+Added: • continued enhancements to cable-based services;
+Added: • newly established fiber-based networks built by competitors or municipalities, often supported by government subsidies.
+Added: Following the recent sale of our Mass Markets Fiber-to-the-Home business, we expect that broadband services will be a significantly smaller portion of our go-forward strategy.
+Added: Legacy Voice Services
+Added: Our legacy voice services face significant competition from wireless voice, social networking, videoconferencing, and messaging platforms as customers shift to these alternatives.
+Added: Additional sources of competition include non-carrier systems capable of partially or fully bypassing our local networks through various methods.
+Added: Software innovations have enabled low-cost networking alternatives, further reducing reliance on legacy voice networks.
We anticipate that all these trends will continue to decrease use of our voice network.
−Removed: We continue to operate various incumbent local telephone carriers ("ILECs"), which are obligated under federal law to permit competitors to interconnect their facilities to the ILEC’s network and to take various other steps that are designed to promote competition, including obligations to (i) negotiate interconnection agreements in good faith, (ii) provide nondiscriminatory “unbundled” access to specific portions of the ILEC’s network and (iii) permit competitors to physically or virtually collocate their plant on the ILEC’s property.
−Removed: Consequently, our ILECs face competition from competitive local exchange carriers ("CLECs"), which typically provide competing services through (i) reselling an ILEC's local services, (ii) using an ILEC's unbundled network elements, (iii) operating their own facilities or (iv) a combination thereof.
−Removed: Additional information about competitive pressures is located under the heading "Risk Factors—Business Risks" in Item 1A of Part I of this report.
−Removed: Sales and Marketing
−Removed: Our enterprise sales and marketing approach focuses on solving complex customer problems with advanced technology and network solutions, striving to make core networks services compatible with digital tools.
−Removed: We also rely on our call center personnel and a variety of channel partners to promote sales of services that meet the needs of our customers.
−Removed: To meet the needs of different customers, our offerings include both stand-alone services and bundled services designed to provide a complete offering of integrated services.
−Removed: Our Business customers range from small business offices to select enterprise customers.
−Removed: Our direct sales representatives generally market our business services to members of in-house IT departments or other highly-sophisticated customers with deep technological experience.
−Removed: These individuals typically satisfy their IT requirements by contracting with us or a rapidly evolving group of competitors, or by deploying in-house solutions.
−Removed: We also market our products and services through inbound call centers, telemarketing and third parties, including telecommunications agents, system integrators, value-added resellers and other telecommunications firms.
−Removed: We support our distribution through digital advertising, events, website promotions and public relations.
−Removed: We maintain local offices in most of the larger population centers within our local service area.
−Removed: These offices provide sales and customer support services to the communities in our local markets.
−Removed: We generally market our business services to members of in-house IT departments or other highly-sophisticated customers with deep technological experience.
−Removed: These individuals typically satisfy their IT requirements by contracting with us or a rapidly evolving group of competitors, or by deploying in-house solutions.
−Removed: Similarly, our sales and marketing approach to our Mass Market customers emphasizes customer-oriented sales, marketing and service with a local presence.
−Removed: Our approach includes marketing our products and services primarily through direct sales representatives, inbound call centers, telemarketing and third parties, including retailers, satellite television providers, door to door sales agents and digital marketing firms.
−Removed: Research, Development & Intellectual Property
+Added: Incumbent Local Exchange Carriers ("ILECs")
+Added: We operate various ILECs that are required under federal law to allow competitors to interconnect their facilities to the ILEC's network and to take other various steps designed to promote competition including:
+Added: • negotiating interconnection agreements in good faith;
+Added: • providing nondiscriminatory “unbundled” access to portions of the ILEC’s network;
+Added: • permitting competitors to collocate facilities on the ILEC’s property either physically or virtually
+Added: Consequently, our ILECs face competition from competitive local exchange carriers (“CLECs”).
+Added: These CLECs typically provide competing services through:
+Added: • reselling an ILEC’s local services;
+Added: • using an ILEC’s unbundled network elements;
+Added: • operating their own facilities;
+Added: • utilizing hybrid approaches of the aforementioned.
+Added: Additional information about competitive pressures is located under the heading "Risk Factors — Business Risks" in Item 1A.
+Added: Research, Development and Intellectual Property
Due to the dynamic nature of our industry, we prioritize investing in developing new products, improving existing products, and licensing third-party intellectual property rights to anticipate and meet our customers’ evolving needs.
3 unchanged sentences
We also occasionally license our intellectual property to others as we deem appropriate.
−Removed: For information on various litigation risks associated with owning and using intellectual property rights, see “Risk Factors—Business Risks” in Item 1A of Part I of this report, and Note 14—Commitments, Contingencies and Other Items to our consolidated financial statements in Item 8 of Part II of this report.
+Added: For information on various litigation risks associated with owning and using intellectual property rights, see “Risk Factors — Business Risks” in Item 1A and Note 15—Commitments, Contingencies and Other Items in Item 8.
Regulation of Our Business
−Removed: Our domestic operations are regulated by the Federal Communications Commission (the “FCC”), by various state regulatory commissions and occasionally by local agencies.
−Removed: Generally, we must obtain and maintain operating licenses from these bodies in most areas where we offer regulated services.
−Removed: For information on the risks associated with the regulations discussed below, see “Risk Factors—Legal and Regulatory Risks” in Item 1A of Part I of this report.
−Removed: Changes in the composition and leadership of the FCC, state regulatory commissions and other agencies that regulate our business could have significant impacts on our revenue, expenses, competitive position and prospects.
−Removed: Changes in the composition and leadership of these agencies are often difficult to predict, which makes future planning more difficult.
−Removed: The following description discusses some of the major regulations that affect our operations, but various others could have a substantial impact on us.
−Removed: For additional information, see "Risk Factors" in item 1A of Part I of this report.
+Added: Our domestic operations are regulated by the Federal Communications Commission (the “FCC”), state regulatory commissions, and occasionally local agencies.
+Added: In most areas where we offer regulated services, we must obtain and maintain operating licenses from these bodies.
+Added: Changes in the leadership or structure of these regulatory bodies can significantly affect our revenue, expenses, competitive position or prospects.
+Added: Because such changes are often difficult to predict, long-term planning is challenging.
+Added: This section highlights certain regulations affecting our operations, though additional regulations could have a significant impact.
+Added: For additional information, see “Risk Factors” in Item 1A.
Federal Regulation
−Removed: The FCC regulates the interstate services we provide, including the business data service charges we bill for wholesale network transmission and intercarrier compensation, including the interstate access charges that we bill other communications companies in connection with the origination and termination of interstate phone calls.
−Removed: Additionally, the FCC regulates several aspects of our business related to international communications services, privacy, public safety and network infrastructure, including (i) our access to and use of local telephone numbers, (ii) our provision of emergency 911 services and (iii) our use or removal (potentially on a reimbursable basis) of equipment produced by certain vendors deemed to cause potential national security risks.
−Removed: We could incur substantial penalties if we fail to comply with the FCC's applicable regulations.
−Removed: Many of the FCC’s regulations adopted in recent years remain subject to judicial review and additional rule-makings, thus increasing the difficulty of determining the ultimate impact of these changes on us and our competitors.
−Removed: Universal Service
−Removed: For several years, the federal government has instituted various funding programs to facilitate greater access to broadband services, including those noted below.
−Removed: Between 2015 and 2021, Lumen received approximately $500 million annually through Phase II of the FCC's
−Removed: Connect America Fund ("CAF II"), a broadband support program that ended on December 31, 2021.
−Removed: Our share of this CAF II funding was approximately $145 million annually.
−Removed: In connection with the CAF II funding, we were required to meet certain specified infrastructure buildout requirements in 13 states by the end of 2021, which required substantial capital expenditures.
−Removed: In the first quarter of 2022, we recognized $13 million of previously deferred revenue related to the conclusion of the CAF II program based upon our final buildout and filing submissions.
−Removed: The government has the right to audit our compliance with the CAF II program.
−Removed: The ultimate outcome of any remaining examinations is unknown, but could result in a liability to us in excess of our accruals established for these matters.
−Removed: In early 2020, the FCC created the Rural Digital Opportunity Fund ("RDOF"), which is a federal support program designed to fund broadband deployment in rural America.
−Removed: For the first phase of this program, RDOF Phase I, the FCC awarded $6.4 billion in support payments to be paid in equal monthly installments over 10 years.
−Removed: Lumen Technologies was awarded RDOF funding in several of the states in which we operate and began receiving monthly support payments during the second quarter of 2022, our share of which is not material.
−Removed: In the third quarter of 2024, we relinquished rights to develop certain RDOF census blocks in four states, which resulted in (i) a reduction of our anticipated RDOF Phase I support payments and (ii) an expectation of payment to the federal government.
−Removed: These impacts are expected to be immaterial.
−Removed: Federal officials have proposed changes to current programs and laws that could impact us, including proposals designed to increase broadband access, increase competition among broadband providers, lower broadband costs and re-adopt "net neutrality" rules similar to those adopted by a few states.
+Added: We are subject to extensive regulation by the FCC and state commissions, including obligations under the Universal Service Fund programs.
+Added: The FCC regulates our interstate services, including business data service charges for wholesale network transmission and intercarrier compensation — such as interstate access charges billed to other communications companies for originating and terminating interstate phone calls and voice services, such as compliance with rules designed to protect consumers against unlawful automated calls or robocalls.
+Added: The FCC also regulates several aspects of our business related to international communications services, privacy, public safety, and network infrastructure, including:
+Added: • our access to and use of telephone numbers;
+Added: • our provision of emergency 911 services;
+Added: • our use or removal (potentially on a reimbursable basis) of equipment from vendors deemed to cause potential national security risks.
+Added: Failure to comply with FCC regulations can result in significant penalties.
+Added: Many recently adopted FCC regulations remain under judicial review or subject to further rule-making, increasing the difficulty of determining the ultimate impact of these changes on us and our competitors.
+Added: Universal Service Fund
+Added: The federal government has introduced several programs to expand broadband access, including the Rural Digital Opportunity Fund (“RDOF”) program, an FCC initiative that provides federal financial support to fund broadband deployment in rural America.
+Added: We were awarded RDOF funding in several of the states in which we operate and received payments for a period starting in 2022.
+Added: In the third quarter of 2024, we relinquished rights to deploy services in RDOF census blocks in certain states, and in the second quarter of 2025, we voluntarily relinquished the remainder of our RDOF awards.
+Added: As a result, we will no longer receive funding through the RDOF program and recognized a reduction to revenue of $11 million in our consolidated statements of operations in the second quarter of 2025.
+Added: We also incurred fees of $12 million in connection therewith, which are reflected in our operating expenses within our consolidated statements of operations for the year ended December 31, 2025.
+Added: In January 2026, we paid the $23 million of revenue and fees summarized above, along with an additional $3 million relating to our 2024 relinquishment as repayment of funds previously received and remittance of the fees incurred.
+Added: In 2024, a federal appellate court ruled that the FCC's universal service funding system, which levied fees against us and other telecommunication companies, was unlawful.
+Added: The Supreme Court reversed that ruling, but the parties challenging the USF program have filed a renewed challenge asserting additional arguments.
+Added: With judicial and legislative proceedings still pending, the ultimate impact of legal challenges and reform proposals on our operations remains uncertain.
+Added: Other Federal Regulation
+Added: Federal officials have proposed changes to current programs and laws that could impact us, including proposals designed to increase broadband access, increase competition among broadband providers, and lower broadband costs.
In late 2021, the U.S.
2 unchanged sentences
We believe that the release of this funding could increase competition for broadband customers.
−Removed: In mid-2024, a federal appellate court rule that the FCC's universal service funding system, which for several years levied fees against us and other telecommunication companies, was unlawful.
−Removed: Due to pending judicial and legislative proceedings, it is unclear how this development may ultimately impact us.
−Removed: For additional information about these programs, see (i) Note 3—Revenue Recognition to our consolidated financial statements in Item 8 of Part II of this report and (ii) "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of Part II of this report.
+Added: For additional information about these programs, see Note 4—Revenue Recognition to our consolidated financial statements in Item 8 and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7.
Broadband Regulation
−Removed: In February 2015, the FCC adopted an order regulating broadband internet access services (“BIAS”) as a common carrier service under Title II of the Communications Act of 1934.
−Removed: In December 2017, the FCC voted to repeal this order.
−Removed: In May 2024, the FCC adopted a new order regulating BIAS as a Title II utility service, but a federal appeals court vacated this order in January 2025.
−Removed: Several states have proposed, implemented or enacted laws or orders focused on state-specific Internet service regulation.
−Removed: In addition, certain members of Congress and various consumer interest groups have advocated in favor of classifying BIAS as a Title II utility service.
−Removed: These developments make it difficult to predict the future degree of regulation of BIAS.
−Removed: Any imposition of heightened regulation of our Internet operations could potentially hamper our ability to operate our data networks efficiently, restrict our ability to implement network management practices necessary to ensure quality service, increase the cost of operating, maintaining and upgrading our network, and otherwise negatively impact our current operations.
+Added: The regulatory environment for broadband internet access service (“BIAS”) has shifted significantly in recent years, creating uncertainty about future requirements.
+Added: Key developments include:
+Added: • FCC classified BIAS as a common carrier service under Title II of the Communications Act of 1934 and imposed net neutrality rules in 2015;
+Added: • FCC repealed the Title II classification and most of the net neutrality mandates in 2017;
+Added: • FCC adopted a new order reclassifying BIAS as a Title II utility service and re-imposing net neutrality rules in 2024;
+Added: • a federal appeals court vacated the FCC's 2024 order, concluding that Congress did not authorize Title II regulations of BIAS in 2025.
+Added: Several states have proposed or enacted laws or orders focused on state-specific Internet service regulation.
+Added: Certain members of Congress and consumer interest groups continue to advocate for classifying BIAS as a Title II utility service.
+Added: These developments create uncertainty regarding the future regulatory landscape for BIAS.
+Added: Any increase in regulation could:
+Added: • hinder our ability to operate our data networks efficiently;
+Added: • restrict necessary network management practices to ensure quality service;
+Added: • increase the cost of operating, maintaining, and upgrading our network.
+Added: Collectively, these developments and potential regulatory changes could materially impact our operations and increase compliance costs.
State Regulation of Domestic Operations
−Removed: Historically ILECs, including ours, have been regulated as “common carriers,” and state regulatory commissions have generally exercised jurisdiction over intrastate voice telecommunications services and their associated facilities.
−Removed: In recent years, most states have reduced their regulation of ILECs.
−Removed: State regulatory commissions generally continue to (i) set the rates that telecommunications companies charge each other for exchanging traffic, (ii) exercise some control over the rates telecommunications companies charge their customers
−Removed: for regulated services, (iii) require ILECs to provide voice service throughout their territories, particularly in areas where alternative voice service is not available, (iv) administer support programs designed to subsidize the provision of services to high-cost rural areas, (v) regulate the purchase and sale of ILECs, (vi) require ILECs to provide service under publicly-filed tariffs setting forth the terms, conditions and prices of regulated services, (vii) limit ILECs' ability to borrow and pledge their assets, (viii) regulate transactions between ILECs and their affiliates and (ix) impose various other service standards.
−Removed: In most states, switched and business data services and interconnection services are subject to price regulation, although the extent of regulation varies by type of service and geographic region.
−Removed: State agencies also regulate certain aspects of non-ILEC communications businesses, including determining carrier's eligibility to receive universal service fund support.
+Added: State regulation of ILECs, including ours, has evolved significantly in recent years.
+Added: Historically, ILECs have been regulated as “common carriers”, with state regulatory commissions exercising jurisdiction over intrastate voice telecommunications services and related facilities.
+Added: While most states have reduced regulation, state regulatory commissions generally continue to:
+Added: • set rates for traffic exchanged between telecommunications companies;
+Added: • exercise some control over rates charged to customers for regulated services;
+Added: • require ILECs to provide voice service throughout their territories, especially where alternative voice services are unavailable;
+Added: • administer support programs subsidizing service in high-cost rural areas;
+Added: • regulate the purchase and sale of ILECs;
+Added: • require ILECs to provide service under publicly-filed tariffs outlining terms, conditions, and prices of regulated services;
+Added: • regulate ILECs’ ability to borrow and pledge their assets;
+Added: • regulate transactions between ILECs and their affiliates;
+Added: • impose various other service standards.
+Added: In some states, switched and business data services and interconnection services remain subject to price regulation, though the extent varies by service type and geographic region.
+Added: State agencies also regulate certain aspects of non-ILEC communications businesses, including determining carrier eligibility for federal universal service fund support.
Data Privacy Laws and Regulations
−Removed: Various foreign, federal and state laws govern our storage, maintenance and use of customer data, including a wide range of consumer protection, data protection, privacy, intellectual property and similar laws.
−Removed: Data privacy regulations are complex and vary across jurisdictions.
−Removed: We must comply with various jurisdictional data privacy regulations, adopted by various jurisdictions in certain of our domestic markets.
+Added: We are subject to numerous foreign, federal, and state laws governing the storage, maintenance, and use of customer data, including consumer protection, data protection, privacy, intellectual property, and other similar laws.
+Added: These requirements are complex and vary widely across jurisdictions.
+Added: International Regulations
+Added: As a global service provider, we must comply with various jurisdictional data privacy regulations, including the EU’s General Data Protection Regulation (“GDPR”) and similar data privacy laws adopted in other jurisdictions of our international markets.
+Added: Domestic Regulations
Domestically, the number of state privacy laws continues to increase.
1 unchanged sentence
These regulations require careful handling of personal and customer data and could have a significant impact on our business, especially if we violate any of those regulations.
+Added: Anti-Bribery and Corruption Regulations
+Added: As a global service provider, we are subject to complex foreign and U.S.
+Added: laws governing business ethics and practices, including the U.S.
+Added: Foreign Corrupt Practices Act, the U.K.
+Added: Bribery Act, and other local laws prohibiting corrupt payments to government officials, as well as anti-competition regulations.
+Added: To mitigate risk, we maintain compliance policies, programs, and training designed to prevent non-compliance with these anti-corruption and fair competition laws across all jurisdictions where we operate.
Other Regulations
−Removed: Our networks and properties are subject to numerous federal, state, and local laws and regulations, including laws and regulations governing the use, storage and disposal of hazardous materials, the release of pollutants into the environment and the remediation of contamination.
−Removed: Our contingent liabilities under these laws are further described in Note 14—Commitments, Contingencies and Other Items.
+Added: Our networks and properties are subject to numerous federal, state, and local laws and regulations, including those governing the use, storage and disposal of hazardous materials, the release of pollutants into the environment and the remediation of contamination.
+Added: Our contingent liabilities under these laws are further described in Note 15—Commitments, Contingencies and Other Items in Item 8.
Certain federal and state agencies, including attorneys general, monitor and exercise oversight related to consumer protection issues.
−Removed: We are also subject to codes that regulate our trenching and construction operations or that require us to obtain permits, licenses or franchises to operate.
−Removed: Such regulations are enacted by municipalities, counties, state, federal, or other regional governmental bodies, and can vary widely from jurisdiction to jurisdiction as a result.
−Removed: Such regulations may also require us to pay substantial fees or impact network buildout initiatives.
+Added: We are also subject to codes that regulate our trenching and construction activities that require us to obtain permits, licenses or franchises to operate.
+Added: These regulations are enacted by municipalities, counties, states, federal government, or other regional governmental bodies and can vary widely across jurisdictions.
+Added: In some cases, such regulations may also require us to pay substantial fees or impose conditions that affect our network buildout initiatives.
Overall, our business is not materially impacted by seasonality.
2 unchanged sentences
The amount and timing of these costs are subject to the weather patterns of any given year, but have generally been highest during the third quarter and have been related to damage from severe storms, including hurricanes, tropical storms, and tornadoes.
−Removed: At December 31, 2024, we had approximately 10,500 employees, of which approximately 42% are members of either the Communications Workers of America ("CWA") or the International Brotherhood of Electrical Workers ("IBEW").
−Removed: See "Risk Factors— Business Risks" in Item 1A of Part I of this report and Note 16—Labor Union Contracts to our consolidated financial statements in Item 8 of Part II of this report for a discussion of risks relating to our labor relations and for additional information on the timing of certain contract expirations.
−Removed: Additional Information
−Removed: For further information on regulatory, technological and competitive factors that could impact our revenue, see "Risk Factors" under Item 1A below.
−Removed: For more information on the financial contributions of our various services, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of Part II of this report.
−Removed: For additional information about us and our ultimate parent, Lumen Technologies, Inc., please refer to the periodic reports filed by Lumen Technologies, Inc.
−Removed: with the SEC, which can be accessed by visiting the websites listed below under “Website Access and Important Investor Information.”
Website Access and Important Investor Information
−Removed: Lumen's and our website is www.lumen.com .
−Removed: We routinely post important investor information in the "Investor Relations" section of our website at ir.lumen.com .
−Removed: The information contained on, or that may be accessed through, our website is not part of this quarterly report.
−Removed: Any references to our website in this report or any other periodic reports that we file with the SEC are provided for convenience only, and are not intended to make any of our website information a part of this or such other reports.
−Removed: You may obtain free electronic copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K filed by us or our ultimate controlling stockholder Lumen Technologies, Inc.
−Removed: (i) in the "Investor Relations" section of our website ( ir.lumen.com ) under the heading "FINANCIALS" and subheading "SEC Filings" or (ii) on the SEC's website at www.sec.gov.
−Removed: In connection with filing this report, our chief executive officer and chief financial officer made the certifications regarding our financial disclosures required under the Sarbanes-Oxley Act of 2002, and its related regulations.
−Removed: As a large complex organization, we are from time to time subject to litigation, disputes, governmental or internal investigations, consent decrees, service outages, security breaches or other adverse events.
−Removed: We typically publicly disclose these occurrences (and their ultimate outcomes) only when we determine these disclosures to be material to investors or otherwise required by applicable law.
+Added: Lumen's and our website is www.lumen.com, and we routinely post important investor information in the “Investor” section of our website at ir.lumen.com .
+Added: Our principal executive offices and telephone number are listed on the cover page of this report.
+Added: Information on our website is provided for convenience only and is not part of this or any other SEC filing.
+Added: Free electronic copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and other information filed with the SEC are available on our website under “Investors” → “Financials” → “SEC Filings” or at https://www.sec.gov.
+Added: Reports for certain subsidiaries are also available.
+Added: Available Information
We typically disclose material non-public information by disseminating press releases, making public filings with the SEC, or disclosing information during publicly accessible meetings or conference calls.
−Removed: Nonetheless, from time to time we have used, and intend to continue to use, our website and social media accounts to augment our disclosures.
−Removed: Although, at various times, we answer questions raised by securities analysts, it is against our policy to disclose to them selectively any material non-public information or other confidential information.
−Removed: Investors should not assume that we agree with any statement or report issued by an analyst with respect to our past or projected performance.
−Removed: To the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not our responsibility.
−Removed: Unless otherwise indicated, information contained in this report and other documents filed by us under the federal securities laws concerning our views and expectations regarding industry conditions are based on estimates made by us using data from industry sources and making assumptions based on our industry knowledge and experience.
−Removed: You should be aware that we have not independently verified data from industry or other third-party sources and cannot guarantee its accuracy or completeness.
+Added: Nonetheless, from time to time we have used, and intend to continue to use, our investor relations website (www.ir.lumen.com) and the following social media accounts to augment our disclosures:
+Added: • https://www.twitter.com/lumentechco;
+Added: • https://www.linkedin.com/company/lumentechnologies;
+Added: • https://www.facebook.com/lumentechnologies;
+Added: • https://www.youtube.com/lumentechnologies
+Added: Please note that this list may be updated from time to time.
+Added: Investors should subscribe to these social media
+Added: accounts and our investor alerts, in addition to following Lumen's press releases, SEC filings, public conference calls and webcasts.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.