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FCC Greenlights Centurytel/Embarq With Wimpy Conditions
Broadband expansion apparently not quite a priority after all...
by Karl Bode 04:08PM Thursday Jun 25 2009 Tipped by Dezbend See Profile
Yesterday we reported how the FCC was getting close to rubber-stamping the Embarq and Centurytel merger, imposing conditions that were little more than window dressing. Today finds the new company (CenturyLink) announcing that the FCC has indeed approved the merger. Calling the FCC's approval a "significant and exciting milestone" in a "rigorous review process," CenturyLink insists the new carrier is "committed to investing in our communities and providing our customers high-quality, reliable communications and expanded broadband services."

The problem is, despite a supposed dedication to broadband expansion, the FCC's conditions have CenturyLink doing absolutely nothing they wouldn't have done already (and perhaps less), requiring they go from 87% to 90% DSL penetration in their phone network footprint within three years. The undermanned FCC apparently wanted to rush the approval on CenturyTel's behest, before new FCC boss Julius Genachowski was appointed as the new agency head. The FCC didn't respond to our request as to why the deal was being rushed.

As with AT&T, the FCC allows the carrier to consider resold satellite broadband to mean they've achieved "100% broadband coverage," ultra-low standards under any metric. In a statement, interim FCC head Michael Copps seems oddly aware at the agency's own failings, despite signing off on the merger. Copps actually takes time to suggest that those disappointed in this merger shouldn't take it as an example of the agency's future behavior when it comes to a national broadband plan, or even future mergers:
quote:
This particular commitment goes significantly beyond the commitments of previous mergers, but it should not be construed as ideal. It should be regarded by no one as a standard or indicative of what to expect from the Commission when it considers future mergers or, for that matter, the national broadband plan that the Commission is currently pursuing.
The FCC of course has a history of rushing through merger approvals at lobbyists' behest, applying meaningless conditions they then fail to enforce. While Copps insists this approval shouldn't be regarded as indicative of future policy, it's not particularly clear why. The FCC has shown repeatedly that the agency's primary function is to serve the will of telecom lobbyists, with consumer welfare generally treated as an afterthought.

While the deal probably should have been approved, why so quickly? And why such toothless conditions?

CenturyTel deal broker and lead lawyer Sam Feder was, until recently, the FCC's General Counsel, continuing the agency's proud tradition of a revolving door between lobbyists/lawyers and technology regulators. One would think the FCC might have been more hesitant if the technology media actually paid attention to the process this week, casting a critical eye on the merger's expedited approval. Instead, the vast majority of the technical media spent yesterday discussing the iPhone app store's first soft porn application.

See: FCC press release and statements from Commisioners Copps, Adelstein and McDowell -- all in pdf format.

view:
topics flat nest 

FFH
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join:2002-03-03
Tavistock NJ
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4 edits

See all the conditions for approval in Appendix C

If you want to see all the conditions imposed and/or agreed to, see starting at page 27(thru 31) of the FCC PDF:
»hraunfoss.fcc.gov/edocs_public/a···54A1.pdf

High level summary of only the broadband conditions:
The merged company expects to make substantial additional investment in broadband services. The
merged company will offer retail broadband Internet access service to 100 percent of its broadband
eligible access lines within three years of the Transaction Closing Date.

· To meet this commitment the merged company will make available retail broadband
Internet access service with a download speed of 768 kbps to 90 percent of its broadband
eligible access lines using wireline technologies within three years of the Transaction
Closing Date. The merged company will make available retail broadband Internet access
service in accordance with the FCC’s current definition of broadband to the remaining
broadband eligible access lines using alternative technologies and operating
arrangements, including but not limited to satellite and terrestrial wireless broadband
technologies.

· In addition, the merged company will make available retail broadband Internet access
service with a download speed of (1) 1.5 Mbps to 87% of the broadband eligible access
lines within two years of the Transaction Closing Date and (2) 3 Mbps to 75% of
broadband eligible access lines within one year of the Transaction Closing Date, 78% of
broadband eligible lines within two years of the Transaction Closing Date, and 80% of
broadband eligible lines within three years of the Transaction Closing Date.

· Broadband eligible access lines are defined as retail single-line residential and single-line
business access lines.
You can read more detailed info on each of the above conditions in the document.
iansltx

join:2007-02-19
Austin, TX
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Re: See all the conditions for approval in Appendix C

On page 31 the broadband details are fleshed out slightly. CenLink will provide 100% penetration in three years and, by the FCC's definition of broadband, that service has to be 768+ kbps. If sat internet can't make that 768 in some areas due to capacity issues, there might be some weasel room in there for customers. In addition, for places that can't get satellite internet CenLink has to figure out some way to get at least 768k to them as a residential tier
me1212

join:2008-11-20
Pleasant Hill, MO

Re: See all the conditions for approval in Appendix C

"To meet this commitment the merged company will make available retail broadband
Internet access service with a download speed of 768 kbps to 90 percent of its broadband
eligible access lines using wireline technologies within three years of the Transaction
Closing Date.

It says they have to be wired not sat or wireless.

And

· In addition, the merged company will make available retail broadband Internet access
service with a download speed of (1) 1.5 Mbps to 87% of the broadband eligible access
lines within two years of the Transaction Closing Date and (2) 3 Mbps to 75% of
broadband eligible access lines within one year of the Transaction Closing Date, 78% of
broadband eligible lines within two years of the Transaction Closing Date, and 80% of
broadband eligible lines within three years of the Transaction Closing Date.
· Broadband eligible access lines are defined as retail single-line residential and single-line
business access lines.

If anyone cares.

Karl Bode
News Guy
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kudos:39

Re: See all the conditions for approval in Appendix C

The merged company will offer retail broadband Internet access service to 100 percent of its broadband
eligible access lines within three years of the Transaction Closing Date.
That metric does include satellite.
To meet this commitment the merged company will make available retail broadband Internet access service with a download speed of 768 kbps to 90 percent of its broadband eligible access lines using wireline technologies within three years of the Transaction Closing Date.
If they're already at 87%, DSL expansion of 1% per year is less than many companies do organically. CenturyTel tells investors they're lowering Capex, so they're actually slowing down expansion over the next three years from my understanding....

Really, these conditions on expansion aren't actually saying anything whatsoever. They're just words on a page.
iansltx

join:2007-02-19
Austin, TX
kudos:2

Re: See all the conditions for approval in Appendix C

Duly noted.
iansltx

join:2007-02-19
Austin, TX
kudos:2
The other 10% can be sat or fixed wireless. Honestly, fixed wireless would be fine with me...sat OTOH sux0rz
me1212

join:2008-11-20
Pleasant Hill, MO

1 edit

Re: See all the conditions for approval in Appendix C

Yeah fixed wireless would work fine. I just hope they don't us sat.

EDIT: Looks like they may be useing some wireless »CenturyTel Plans To Use LTE For Rural Deployment

cameronsfx

join:2009-01-08
Panama City, FL
I guess Barack Obama's "Change" meant just Higher Taxes.

Time
Premium
join:2003-07-05
Mclean, VA
Considering Embarq can't even deploy their highest tiers city-wide in Vegas, I don't have much hope for CenturyLink.
--
"If it can't be done with brains, it can't be done with hours" - Clarence "Kelly" Johnson

fifty nine

join:2002-09-25
Sussex, NJ
kudos:2

Re: See all the conditions for approval in Appendix C

Same here in NJ.

I was hoping the merger would have meant some form of FTTH, but it looks like the cable company will be getting my business for now.

Time
Premium
join:2003-07-05
Mclean, VA

1 edit

Re: See all the conditions for approval in Appendix C

said by fifty nine:

Same here in NJ.

I was hoping the merger would have meant some form of FTTH, but it looks like the cable company will be getting my business for now.
It seems CenturyTel's idea of "FTTH" is 20 Mbps, which Cox can surpass fairly easily. I think those of us stuck in Embarq's service (or lack there-of) regions are screwed. As much as people rag on AT&T, at least they are working to provide something more than ADSL, 1.5 Mbps ADSL to urban regions at that. I could totally understand the lack of service if this was a small town with sparse farms, but you have literally a ton of customers in areas of Vegas that are either without DSL, or stuck with the lower tiers. How about some competition?

2 more years and I'm out of this hellhole, hopefully I am stationed in a Verizon FiOS area next time around.
--
"If it can't be done with brains, it can't be done with hours" - Clarence "Kelly" Johnson
me1212

join:2008-11-20
Pleasant Hill, MO

Re: See all the conditions for approval in Appendix C

"It seems CenturyTel's idea of "FTTH" is 20 Mbps"

Its a start, at least they are doing something, and they can(and most likely will) up the speed some time.
iansltx

join:2007-02-19
Austin, TX
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Apples to oranges.

I'm pretty sure CenturyTel isn't in any heavily competitive markets. 20 Mbps fiber, and Windstream's 24 Mbps service, are competing against DOCSIS 1.1. By its nature, fiber can be ratcheted up to as high speeds as are needed to compete. When CenTel does fiber, it's the best-speed service in the area.

On the DSL side of things, yes it's crappy. Then again, AT&T's U-Verse tops out at 18 Mbps if you don't have TV running, 15 Mbps if you do. That's their next-generation technology. DOCSIS 3 beats that, too.

Time
Premium
join:2003-07-05
Mclean, VA

Re: See all the conditions for approval in Appendix C

said by iansltx:

Apples to oranges.

I'm pretty sure CenturyTel isn't in any heavily competitive markets. 20 Mbps fiber, and Windstream's 24 Mbps service, are competing against DOCSIS 1.1. By its nature, fiber can be ratcheted up to as high speeds as are needed to compete. When CenTel does fiber, it's the best-speed service in the area.

On the DSL side of things, yes it's crappy. Then again, AT&T's U-Verse tops out at 18 Mbps if you don't have TV running, 15 Mbps if you do. That's their next-generation technology. DOCSIS 3 beats that, too.
I'd happily accept U-Verse over the 1.5 Mbps DSL that is available to me, at least it would give the local cable company a reason to transit to DOCSIS 3.0.

Vegas could be a competitive market, but Embarq ignores it. I'm pretty sure that CenturyLink will ignore it as well, which is sad because the old Sprint had this city wired with tons of fiber.
--
"If it can't be done with brains, it can't be done with hours" - Clarence "Kelly" Johnson
iansltx

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Re: See all the conditions for approval in Appendix C

I'm surprised nobody has done anything with Vegas...don't you guys have Clear wireless broadband now? Don't tell me it's lame; 6 Mbit down and 512k up is better than 1.5/512 on Embarq.

As for U-Verse, cable companies don't need to upgrade to even DOCSIS 2.0 to deal with them. A decent cable system (860MHz or so of bandwidth) on DOCSIS 1.1 has successfully allowed for 15/2 and even 20/1.5 internet service, which meet or beat U-Verse. Kick in some PowerBoost and U-Verse is vanquished.

The only thing that competes with DOCSIS 3 on speed is fiber at this point. VDSL2 might be an option, but nobody's deploying it.
jjeffeory

join:2002-12-04
USA

Re: See all the conditions for approval in Appendix C

U-verse experince is better than Cox in Vegas on the TV side. Embarq is a joke around here. Cox owns the market for sure. Clearwire wouldn't work for a home with that lovely 5GB cap they have! Man, Vegas needs more options! Fios here would be wonderful!

Time
Premium
join:2003-07-05
Mclean, VA

1 edit

Re: See all the conditions for approval in Appendix C

said by jjeffeory:

U-verse experince is better than Cox in Vegas on the TV side. Embarq is a joke around here. Cox owns the market for sure. Clearwire wouldn't work for a home with that lovely 5GB cap they have! Man, Vegas needs more options! Fios here would be wonderful!
I'd kill to have Verizon here, or even AT&T. Here's to hoping CenturyLink realizes it bit off more than it can chew and sells this market off to a real teclo.
--
"If it can't be done with brains, it can't be done with hours" - Clarence "Kelly" Johnson
iansltx

join:2007-02-19
Austin, TX
kudos:2
Uh, ClearWire doesn't have caps on their new WiMAX service.
nasadude

join:2001-10-05
Rockville, MD

1 recommendation

need more be said?

CenturyTel deal broker and lead lawyer Sam Feder was, until recently, the FCC's General Counsel.
says it all, doesn't it?
iansltx

join:2007-02-19
Austin, TX
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1 recommendation

Devil's Advocate

I'll bet I'm going to get a firestorm here, but

1. Embarq and CenTel merging should result in a stronger company capable of delivering better services to their subscribers, right? Or maybe making investors happy with better economies of scale. The companies didn't merge to be forced into any crazy regulations by Uncle Sam.
2. While telephone is a regulated utility, ultimately competition from cable etc. is going to drive forward progress. If you don't like the lack of DSL penetration in your area, buy a business-grade circuit and do wireless service off of it. If the service is good enough you're now in a competitive market and that's better for everyone.
3. Embarq and CenturyTel are both ILECs only. This merger, unlike the one between Sprint and Nextel, doesn't take competition out of the equation. There won't be areas where two companies who previously competed will become one.
4. Right now, CenLink can compete on three things: price, features (speed etc.) and/or reach. Since DSL can't compete against cable on speed (unless you're going up against TWC in North Carolina with 512 kbps up on their Turbo plan) the company needs to price lower, move outward or install fiber to expand. It's a public entity therefore it has to expand to serve investors. It has to compete to expand. So by that chain of reason customers will benefit, at least in the long term, since the new company has, as said before, better economies of scale for expansion.
5. Landline revenues are dropping. Embarq and CenTel know this, so they have to do something halfway decent or they'll end up with two million customers instead of seven. Agaian, in order to keep investors happy the companies have to grow somehow.

Bottom line: not sure why everyone has their panties in a wad about "big bad CenLink". Pretty surethis means good things for their customers in the long run. For all its failings, AT&T didn't come out with U-Verse until after the SBC merger.

morbo
Complete Your Transaction

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Re: Devil's Advocate

said by iansltx:

For all its failings, AT&T didn't come out with U-Verse until after the SBC merger.
ugh
iansltx

join:2007-02-19
Austin, TX
kudos:2

Re: Devil's Advocate

I told you I was playing Ddevil's advocate

Personally, having telco internet with above 896k up is nice...Qwest doesn't know of such a thing.
sonicmerlin

join:2009-05-24
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Re: Devil's Advocate

You have low standards buddy.
iansltx

join:2007-02-19
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Re: Devil's Advocate

CenTel and Embarq tend to be in more rural areas. Not always the case, but in those areas cable generally doesn't go. Or in some situations cable is crappy. So 768k sometimes is actually a decent option...I'd much rather have 768k DSL than satellite of any speed. heck, if DIALUP went at 256k I'd pick it over satellite
sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1

Re: Devil's Advocate

Did you know over a year ago Japan launched a satellite internet service capable of 100+ mbit/s speeds so rural citizens could have fiber-quality speeds?
iansltx

join:2007-02-19
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Reviews:
·Time Warner Cable
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Re: Devil's Advocate

I'll take U-Verse over 100 Mbit satellite.

1. Better uploads
2. Better latency

Now don't say satellite again or I'll slap you around with your choice of a dish or a WildBlue modem. Seriously, 1.5 seconds of latency = pull-your-hair-out-and-wonder-why-you-aren't-using-dialup.

Also, that's Japan. You're free to move.
me1212

join:2008-11-20
Pleasant Hill, MO
"in order to keep investors happy the companies have to grow somehow."

Correct and how do they do that? 1. Expand DSL to areas that do not have it right now. 2. Expand the fiber service+IPTV to areas that have DSL already and are profitable enough. I just hope the iptv does not compel them to start capping, well it hasn't yet so we can only hope. And if they don't have a cap it can persuade people who have cable with a cap to switch.

Karl Bode
News Guy
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kudos:39

Re: Devil's Advocate

The problem is that expansion isn't profitable. Doing things like behavioral ads or getting into content are profitable. Serving rural America isn't in the plans for anything but the tiniest of carriers who don't need to placate investors.
me1212

join:2008-11-20
Pleasant Hill, MO

Re: Devil's Advocate

said by Karl Bode:

Serving rural America isn't in the plans for anything but the tiniest of carriers who don't need to placate investors.
Weren't they going to use LTE for rural? »CenturyTel Plans To Use LTE For Rural Deployment
beaups

join:2003-08-11
Hilliard, OH
And had they not merged would the expansion, specifically the rural expansion have happened faster? I don't see anything unreasonable here at all. Maybe it didn't get tech media coverage because this deal didn't deserve tech media coverage.

Karl Bode
News Guy
join:2000-03-02
kudos:39

1 edit

Re: Devil's Advocate

And had they not merged would the expansion, specifically the rural expansion have happened faster?
You miss the point. The merger was an opportunity for an FCC that's been prattling on about what a priority broadband expansion is to actually do something about broadband expansion. Instead, they decided to enact wholly meaningless conditions for a former colleague who's now a lawyer at CenturyTel. That's a story. In any language.
Maybe it didn't get tech media coverage because this deal didn't deserve tech media coverage.
Maybe it didn't get tech media coverage because the tech media is too busy fellating Apple and trolling brand fanboys for advertising eyeballs.
iansltx

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The problem here is lack of competition (whoda thunk?). In a duopoly situation, it's easy for everyone to do behavioral advertising and lower the bar together. This tacit collusion isn't doable in highly competitive markets because one competitior will decide not to do the advertising in order to get more customers.

Also, rural customers will pay $50 for a 512k connection. Once you build out the infrastructure they're quite profitable because you are the only game in town in all likelihood. In less competitive areas they're the most loyal customers you've got.

Case in point: around here there's no DSL to speak of. The local wireless operator has let their network go to seed but where are customers going to go? WildBlue? CenturyTel serves areas like those.

Granted, the following example is a co-op, but HCTC (hctc.net), seeing that they weren't going to keep gaining landline subscribers, decided to outfit their network with digial loop carriers to enable DSL service. Now average loop lengths are 7k feet (crazy if you know the market they serve) and their DSL packages are as follows (all require home phone service):

128/64 - $17.95
512/256 - $39.95
1024/512 - $59.95
3072/768 - $69.95

$70 per month plus a landline may sound like a lot for a mere three megabits of internet connectivity, but when your alternative realistically tops out at 1.5/256 (who's going to buy 5 Mbit down, 300k up on HughesNet? Bueller? Bueller?) for the same price (HCTC worked out a nice deal with WildBlue) who ya gonna call?

Now that HCTC has DSL to these areas, they'll be able to sell as much as $100 per month in services (local + features + LD + DSL + security) to people for five years or more. How's that for ROI? Certainly better than getting a lame cut from WildBlue and watching your landline revenues go away as cellular providers build out their networks.
puck0114

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Portland, OR
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said by iansltx:

AT&T didn't come out with U-Verse until after the SBC merger.
Two corrections here:

1. SBC, not AT&T, initiated U-verse
2. SBC had already begun the project to deploy U-verse before the AT&T merger.
iansltx

join:2007-02-19
Austin, TX
kudos:2

Re: Devil's Advocate

I stand corrected. Yay for the web, rights all wrongs, right?

clydeglyde

@centurytel.net
in columbia,mo.ctel has its own iptv for about a year now.aka uverse.

FFH
Premium
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Tavistock NJ
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iTunes porn app servers buried

»FCC Greenlights Centurytel/Embarq With Wimpy Conditions
technical media spent yesterday discussing the iPhone app store's first soft porn application.
That app didn't stay live long. Servers overloaded.
»tech.yahoo.com/news/pcworld/2009···omitunes
It appears Apple has not banned "Hottest Girls" application. The app developer claims in a note on his site that the application is "sold out" due to a strain on the servers. "Hottest Girls" loads the images it displays from the developer's servers and the "popularity of this app" could crash them, he says.

The developer claims he asked Apple to temporarily suspend the sales of this app until the problem is solved. Those who already purchased the application will still be able to use it, the message to his site says.

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Jim Kirk
Premium
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Re: iTunes porn app servers buried

Did you try it out? Just asking.

FFH
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Tavistock NJ
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Apple kills porn app in iTunes - calls developer a liar

»news.cnet.com/8301-13579_3-10273···1_3-0-20
a note on the developer's Web site indicated that he asked for the app to be removed.

As it turns out Apple did pull the app--the company confirmed the move in a statement provided to CNET on Friday.

"Apple will not distribute applications that contain inappropriate content," Apple's statement reads. "The developer of this application added inappropriate content directly from their server after the application had been approved and distributed, and after the developer had subsequently been asked to remove some offensive content. This was a direct violation of the terms of the iPhone Developer Program. The application is no longer available on the App Store."
This makes more sense in light of past actions Apple has taken concerning iTunes apps.
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Fox McCloud
Crazy like a fox.

join:2006-07-23

How about an actual rural Embarq customer weighs in?

Ok, I'm hearing a lot of talk about how Embarq will do this and do that.

I'm cautiously optimistic. I live in the middle of nowhere...an area where it's 1/3 of a mile (or more) away to your nearest neighbor, and it's mostly farmland. In any event, just this past October (2008), Embarq deployed DSL in the area....keep in mind this is an area where cable will likely never be.

I pay $54.95 for their 10 meg/896k package, which hovers around 9880-9900k down and 800-830k up (with an average latency of 31 ms to Google). I might also add that this is dry-line/naked DSL (which, incidentally, Embarq does not charge extra for).

In any event, Embarq is definitely expanding, even in rural areas, and from my experience (and that of a few others) it seems they're not just attempting to offer 768k either.

I might also add that Embarq has recently begun offering their "extended reach" DSL (which is 768k) for customers who are past the first load coil.

I'm more worried about CenturyTel messing things up than Embarq...that said, I've heard (can't 100% confirm it) that Embarq will essentially still be in control of a great number of things in the company (despite the fact CenturyTel bought Embarq, and not the other way around).

We'll just have to see what turns up, but I wouldn't pooh-pooh it until we actually see the new company in action.

linicx
Caveat Emptor
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United State
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Been There, Done That

CenturyTel peddles abysmal landline bundled with horrid broadband speed to rural America for an outrageous price. They are very good a milking the "land of honey" while plotting to gobble up another company. Those that like heir Embarq connection are in for a very rude awakening.

I was done with them in less than a year and that was six months too long. CenturyTel targets small rural areas believing we don't know we can do better. We can and we do. My down speed more than tripled, plus I have cable and VOIP. I pay $20 less for more services. They sell Direct-TV. You get a better deal, better service and better price by buying from Direct TV and you don't CenturyTel's two contracts.
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